CEMAC Banking Sector: Positive assessment but...

COBAC officials disclosed during their 7th annual meeting with banking institutions in Douala July 3rd.

“Banking situation in the Central African Economic and Monetary Community, CEMAC, have registered remarkable improvement owing to the recovery of oil activities and the good performance of the non-oil sector. With the current trend, the growth rate in 2015 should be around 2 per cent,” the President of the Central African Banking Commission, COBAC, who doubles as the Governor of the Bank of Central African States (BEAC), Lucas Abaga Nchama, made the statement during the 7th annual consultation meeting with officials of banking sector in the CEMAC zone in Sawa Hotel, Douala on July 3rd.

He however lamented that the apparent quality of loan portfolio has somewhat deteriorated and urged credit institutions to sustainably respect standards set by COBAC.

In the presence of the Secretary General of COBAC, Halilou Yerima Boubakary, COBAC President gave a brief account of 2014 economic performance saying it was better than 2013 though below initial forecast. Economic growth rose to 4.4 per cent in 2014 as against 1.6 per cent in 2013, despite the resurgence of inflationary pressure.

Painting that of 2015, Abaga Nchama said there is a growth of key aggregates. The total aggregated balance-sheets of banks in the CEMAC zone stood at FCFA 12,571 billion to March 2015; an 8.62 per cent increase compared to March 31, 2014. The deposit collected in 2015 amounted to FCFA 9,944 billion; increased by 6.51 per cent in annual variation while gross loans amounted to FCFA 7,528 billion, up by 8.07 per cent compared with their level in March 2014.

Though 24 banks have sufficient capital and respect aggregate standards, the apparent quality of loan portfolio has deteriorated and the outstanding debts totalled FCFA 894 billion to March 2015 against FCFA 696 billion in 2014.

The Douala meeting focused on three major themes on topical issues in the banking system with the first on the implementation of the COBAC regulation R-2014/01 by COBAC Secretary General, Halilou Yerima Boubakary and the second on the appeals of financial institutions before the Community Court presented by a Judge in the CEMAC Court of Justice, Georges Taty.

Since 2008, regular consultations to assess the CEMAC banking situations was put in place in order to solve misunderstanding that may exist between the banking regulator and financial institutions and analyse the evolution of the economic and financial conditions in order to improve and promote good practices in the sector.