Latest news with #NPLs
Zawya
11 hours ago
- Business
- Zawya
African Peer Review Mechanism (APRM): 'Fitch's Downgrade of Afreximbank's Rating is Based on Flawed Loan Classification'
In line with Decision [Assembly/AU/Dec.631(XXVII)] of the African Union Assembly of Heads of State and Government and Article 6(g) of the African Peer Review Mechanism (APRM) Statute (2020), which together mandate the APRM to provide support to African countries in the field of credit ratings. The APRM routinely undertakes independent analyses of rating actions and commentaries issued by international credit rating agencies on African sovereigns and multilateral financial institutions. On 4 June 2025, Fitch Ratings downgraded African Export-Import Bank (Afreximbank), lowering its long-term foreign currency issuer default rating from 'BBB' to 'BBB-' with a negative outlook. Fitch justified its decision by citing a perceived increase in credit risk and weak risk management policies, based on its estimate that the bank's non-performing loans (NPLs) stood at 7.1%. This estimate stems from Fitch's classification of exposures to the sovereign Governments of Ghana (2.4%), South Sudan (2.1%) and Zambia (0.2%) as NPLs. Notably, this 7.1% figure is significantly higher than the 2.44% ratio reported by Afreximbank in its own disclosures. The APRM notes with concern Fitch Ratings' misclassification of Afreximbank's sovereign exposures to the Governments of Ghana, South Sudan and Zambia as NPLs. This classification raises critical legal, institutional and analytical issues which the APRM strongly contests. The assumption that Ghana, South Sudan and Zambia would default on their loans to Afreximbank is inconsistent with the 1993 Treaty establishing the Bank to which Ghana and Zambia are both founding members, shareholders and signatories. The Multilateral Treaty signed in 1993 is legally binding on all member countries, imposing specific legal obligations related to the Bank's protection, immunities and financial operations. By virtue of this Treaty, loans extended by Afreximbank to its member countries are governed by a framework of intergovernmental cooperation and mutual commitment, rather than typical commercial risk principles. It is, therefore, legally incongruent to classify a loan to member countries as non-performing, especially when the borrower states are shareholders in the lender institution, no formal default has occurred and none of the sovereigns have repudiated the obligation. Fitch's unilateral treatment of these sovereign exposures – as comparable to market-based commercial loans – despite their backing by treaty obligations and shareholder equity stakes, is flawed. Doing so reflects a misunderstanding of the governance architecture of African financial institutions and the nature of intra-African development finance. Fitch has misinterpreted the invitation extended by Ghana, South Sudan and Zambia to Afreximbank to discuss the loan repayments as signalling an intention to default and/or to lift the Preferred Creditor Status. The APRM calls upon Fitch Ratings to re-examine its criteria and assumptions in this case and to engage in technical consultations with Afreximbank and other relevant African stakeholders. Objective, transparent and context-intelligent credit assessments are critical to ensuring fair treatment of African institutions in the global financial system. The APRM reaffirms its commitment to promoting accuracy in the credit ratings. Distributed by APO Group on behalf of Afreximbank. APRM CREDIT RATING RESEARCH &ADVISORY For inquiries contact: Dr McBride Nkhalamba Ag. Director of Governance&Specialised Reporting Dr Misheck Mutize Lead Expert on Credit Rating Agencies Ms. Ejigayhu Tefera Researcher For media inquiries or further information, please contact the APRM Continental Secretariat at info@ @ APRMorg – X
Yahoo
01-05-2025
- Automotive
- Yahoo
Thai vehicle sales decline down slightly in March
Thailand's new vehicle market declined slightly to 55,798 units in March 2025 from a weak 56,099 units a year earlier, according to the latest wholesale data released by the Federation of Thai Industries (FTI). The market looks like it is beginning to bottom out after two years of sharp decline, much of which has been blamed on stricter lending criteria introduced by banks and auto finance companies in response to rising levels of non-performing loans (NPLs) - leaving the country's highly indebted consumers and small businesses struggling to access financing. FTI data show vehicle sales last year fell by 26% to 572,675 units from 775,780 in 2023 - the lowest level since 2009, with the auto loan rejection rate reported to have exceeded 70% during the year. Vehicle sales in the country declined by 6.5% to 153,193 units in the first quarter of 2025 from 163,756 units in the same period of 2024, with sales of pickup trucks declining by 13% to 40,475 units; passenger pickup trucks 9,387 units (-4%); internal combustion engine (ICE) passenger vehicles 37,555 units (-14%); hybrid vehicles 35,781 units (-2%), while sales of battery electric vehicles (BEVs) increased by 19% to 22,737 units. At the end of March, the Thai government made available THB 5 billion to fund a loan guarantee programme to support the country's struggling pickup segment. The programme, scheduled to run until the end of the year, offers loan guarantees for small and medium-sized businesses planning to purchase pickup trucks for business purposes. The government has also approved a lower sales tax rate for plug-in hybrid electric vehicles (PHEVs), scheduled to become effective from the beginning of 2026. Thailand remains the ASEAN region's largest vehicle producer, despite a 14% drop in output to 352,499 units in the first quarter of 2025. Exports fell by 19% to 220,139 units, due to lower overseas demand, rising competition from China-based automakers and tightened emissions regulations in some key markets. The Federation now expects full-year vehicle output to drop to 1.4 million units in 2025, down from the 1.5 million units it had forecast earlier in the year. This compares with 1.84 million units produced in 2023. Vehicle and component manufacturers also face the added pressure of new import tariffs in the US. "Thai vehicle sales decline down slightly in March" was originally created and published by Just Auto, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
