Latest news with #IFRS9
Int'l Business Times
6 days ago
- Business
- Int'l Business Times
Nikhitha Pesaru: Transforming Banking Data Solutions with Artificial Intelligence, Data Architectures, and Cloud Technologies
In an era where digital transformation and data are the lifeblood of financial institutions, Nikhitha Pesaru stands out as a pioneering leader in AI-driven banking product solutions, scalable data architectures, and advanced cloud technologies. Her expertise enables banks to harness the full potential of their data while ensuring compliance, security, and ethical AI deployment. By integrating cutting-edge artificial intelligence (AI), machine learning (ML), and cloud technology frameworks, she is redefining how financial institutions operate in a data-centric world. Nikhitha's work in AI-driven banking solutions empowers financial institutions like Bank of America to deliver smarter, faster, and more personalized services. Her key contributions include: 1. Hyper-Personalized Financial Products Leveraging predictive analytics and customer segmentation models, banks can now offer tailored loans, credit, and investment products. AI-driven recommendation engines analyze transaction history, spending patterns, and life events to suggest optimal financial solutions. 2. Real-Time Fraud Detection & Risk Management Advanced anomaly detection algorithms monitor transactions in real-time, reducing fraud losses. AI models assess credit risk using alternative data like cash flow analytics and social media signals for more accurate underwriting. 3. Automated Regulatory & Compliance Reporting AI-powered Natural Language Processing automates the extraction of critical data for IFRS 9 and Anti-Money Laundering compliance. Reduces manual errors and accelerates audit readiness. To support AI and real-time analytics, Nikhitha Pesaru designs high-performance data architectures that ensure scalability, security, and agility: 1. Cloud-Native Data Lakes & Warehouses Implement hybrid cloud solutions (AWS) with Delta Lake, Snowflake, and Databricks for seamless data integration. Optimizes storage costs while enabling real-time analytics. One of Nikhitha's most critical contributions to the banking and technology industry is her data governance solutions and expertise, ensuring that AI and analytics operate within regulatory, ethical, and security boundaries. Her approach includes regulatory compliance & data privacy, master data management (MDM) & Data Lineage, and role-based access control (RBAC) & encryption. Nikhitha Pesaru stands at the forefront of revolutionizing banking product infrastructure and network systems through artificial intelligence (AI) and advanced cloud technologies. As a visionary technology leader, she designs and implements scalable, secure, and intelligent infrastructure solutions that empower financial institutions to operate with unprecedented efficiency, agility, and innovation. By integrating AI-driven automation, hybrid cloud architectures, and software-defined networking (SDN), Nikhitha is reshaping how banks manage their core infrastructure by ensuring high availability, real-time processing, and fortified cybersecurity in an increasingly complex financial ecosystem. Nikhitha Pesaru's work represents the perfect synergy of AI innovation, scalable data infrastructure, and ironclad governance. In an industry where trust, security, and efficiency are paramount, her solutions ensure that banks can leverage AI responsibly and at scale. Nikhitha Pesaru is an expert at the digitalization of core banking platforms, the digital enablement of customer interactions, boosting analytical capabilities, enabling cloud functionality, and offering innovation in a notoriously challenging industry. Though some projects require a combination of these focus areas, while others only need one or two, her ability to adapt a solution to fit business needs keeps projects agile, effective, and affordable. Nikhitha's track record of leading data transformation of banking products and modernizing organizations from the bottom up speaks for itself. She successfully proposed an AI-integrated data strategy that would move one organization to an updated system without compromising the critical production environment needed to keep operations moving. Her innovative approach saved the client $2 million annually on system maintenance. Nikhitha Pesaru's work in AI-driven infrastructure, cloud modernization, and intelligent networking is setting new benchmarks for the banking industry. Her solutions ensure that financial institutions are not just keeping pace with digital transformation but leading it with security, scalability, and innovation at the core. As financial institutions continue their digital transformation, leaders like Nikhitha Pesaru will be instrumental in shaping a future where data-driven banking is not just powerful but also transparent, ethical, and secure.
Morocco World
26-07-2025
- Business
- Morocco World
Morocco's Banks See Drop in Bad Loans Despite Rising Provisions
Rabat — Morocco's central bank, Bank Al Maghrib (BAM), has reported that non-performing loans at the country's banks fell 2.7% to MAD 97.4 billion ($ 10.86 billion) in 2024. According to the central bank's latest annual banking supervision report, this level represents a loss rate of 8.4%, indicating an improvement of 0.1 percentage points compared to the previous year. The analysis by risk level reveals varying trends across different loan categories. Banks classified 6.5 billion dirhams in loans as 'under surveillance,' marking a 4.1% increase from 2023. Meanwhile, doubtful debts decreased by 1.7% to MAD 8.7 billion ($970.136 million). However, the central bank confirmed that bad debts rose 3.1% to reach MAD 82.2 billion ($ 9.16 billion), representing the largest portion of troubled loans. The distribution shows bad debts dominate at 84% of all non-performing loans, followed by doubtful debts at 9% and loans under surveillance at 7%. Provisions to cover non-performing loans increased 4.6%, which improved the coverage rate by two percentage points to 69% year-over-year. The coverage rate varies significantly by loan type: 76% for bad debts, 45% for doubtful debts, and 11% for loans under surveillance. Banks also set aside MAD 17.1 billion ($ 1.9 billion) in general provisions to cover sensitive loans, representing 1.6% of healthy loans. On a consolidated basis, non-performing loans held by customers of 11 banking groups totaled MAD 134.6 billion ($ 15 billion), up 2% compared to the end of 2023. When accounting for loan growth, the risk rate improved by 0.2 percentage points to 9%. These 11 banking groups increased their provisions by approximately 5% to around 93 billion dirhams, following a 2.6% increase the year before. This resulted in a coverage rate increase of two percentage points to 69%, up from 67% in 2023. Foreign operations show better performance Non-performing loans carried by foreign bank branches, particularly in other parts of Africa, totaled MAD 16.1 billion ($ 1.79 billion). The risk rate for these operations decreased 0.1 percentage point to 7.2%. The coverage rate for these debts improved 1.3 percentage points to 82.4%, up from 81.1% in 2023. Banking groups also allocated provisions to cover sensitive loans that meet IFRS 9 accounting standards at an average rate of 16.9%. They covered healthy loans showing no signs of weakness with preventive provisions representing 0.8% of their total outstanding amounts. Household debt shows concerning trends For households, non-performing loans held by banks and financing companies rose 6.7% after increasing 6.4% the previous year, reaching 44.6 billion ($ 4.97 billion). This led to an increase in the risk rate of 0.3 percentage points to 10.5%. This development reflects a 0.3 percentage point increase to 10.6% for resident households and an improvement of 0.6 percentage points to 7.1% for non-resident households. The coverage rate for these debts reached 64%. Corporate sector performance varies by industry Non-performing loans held by non-financial companies increased 0.7% to 70.1 billion ($ 7.81 billion), but the risk rate declined to 11.1% during 2024. Provisions cover 73% of these debts. The construction and public works sector saw a slight decrease in bad loans (down 0.8%) with a risk rate of 13.7%. The trade sector experienced growth in bad debts (up 4.3%) with an increase in the loss rate to 15.7%, making it one of the higher-risk sectors in Morocco's banking system. Tags: Bad loansMorocco's banking sectornon-performing loans
Economic Times
26-06-2025
- Business
- Economic Times
Now, give credit where credit's due
Washington: As leaders gather in Seville for the UN Financing for Development meet that starts from June 30, putting developing countries' needs first - and fixing the broken credit-rating system - must top the agenda, along with operationalising Africa Credit Rating Agency (AfCRA). Today, Fitch, Moody's and S&P dominate the credit-rating landscape, with their assessments influencing the cost of capital for countries. In 2023, many developing nations paid over 5 percentage points more than developed economies when borrowing from instruments deployed by MDBs and DFIs include direct debt and equity, lines of credit to commercial banks, intermediated investments via funds (including impact funds), guarantees and technical assistance. They also provide concessional finance, which mobilises private investors. Today, most lending from MDBs and DFIs focuses on infra: 34% of concessional and market-rate finance provided in the 'global south' in 2021 ($2.5 bn) focused on this sector. This compares with only 7% focused on the farm sector in the same year, and far less in climate adaptation. However, regulations such as Basel 3 and 4, set up in 2008-09, to respond to financial crises, and reporting requirements of the financial system, such as International Financial Reporting Standards 9 (IFRS 9) and 10 (IFRS 10) are biased against incorporating realities of the developing world. These regulations and standards also affect lending from national and public development banks, which are similarly deterred from investing in agriculture and climate a result, (multilateral and national) banks end up allocating their capital to less-risky sectors - those that, for instance, have more regular payments than the seasonal nature of agriculture allows, offer more predictable returns, and require lower capital capital adequacy requirements also limit banks' overall lending capacity, increasing the opportunity cost of lending to businesses perceived as higher risk and less profitable (e.g., smaller or less formal businesses in rural areas).As a result, in East African countries, central banks require domestic commercial banks to hold 10-15% of their capital, well above Basel 3 requirements (8.5%). This exacerbates low levels of commercial bank lending to the agriculture sector, which in 2019 averaged just 6% despite the sector contributing about 60% to Basel 4 regulations require banks to take a standardised approach to determining risk-weighted assets. These disincentivise global banks from financing rural infra projects in the 'global south', which are perceived as Basel 4 implementation began in 2023, banks could use proprietary models, which considered investment history, to allocate risk weightings to different assets. Now, they must use standardised capital weightings, which assign higher risk weightings to investments in countries with low national credit ratings, and to loans with longer standardised approaches to calculating risk-weighted assets (RWAs) do not account for the reduced risk associated with banks - or other investors - investing in senior tranches of blended finance structures where a first-loss guarantee has been provided by an impact investor or DFI. This has also meant that participating in blended finance confers no additional advantage to investors, irrespective of a first-loss risk being taken by another skewed nature of risk appraisal also affects MDB lending. They target AAA credit ratings from major credit-rating agencies to ensure they can borrow at low cost. While this allows MDBs to pass on the benefit of low-cost borrowing to borrowers (including rural businesses), in practice, MDBs manage their capital to protect these credit ratings. This limits their capacity to take on ventures perceived as risky, including those in rural or agricultural countries are significantly more agricultural and rural. Lending in these contexts should not be automatically deemed 'below investment grade', forcing banks to write down assets. Seville must call for reform of international rating architecture, which unfairly treats high-liquidity, essential sectors in developing regions as high-risk. (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. Punit Goenka reloads Zee with Bullet and OTT focus. Can he beat mighty rivals? 3 critical hurdles in India's quest for rare earth independence HDB Financial may be cheaper than Bajaj Fin, but what about returns? INR1,300 crore loans for INR100? Stamp duty notice to ArcelorMittal, banks. Stock Radar: Titan Company breaks out from 3-month consolidation; check target & stop loss for long positions For risk-takers: More than bullish, be selective; 5 mid-cap stocks from different sectors with an upside potential of up to 38% Multibagger or IBC - Part 12: If transition is successful then there is no limit. But there is a big 'IF' These mid-cap stocks with 'Strong Buy' & 'Buy' recos can rally over 25%, according to analysts
Business Recorder
04-06-2025
- Business
- Business Recorder
Fitch downgrades Afreximbank to one notch above ‘junk'
LONDON: Fitch downgraded Afreximbank's credit rating to one notch above junk on Wednesday, with a negative outlook, citing high credit risks and weak risk-management policies. The one-notch downgrade to BBB- comes as the African lender battles to protect its loans from restructuring in Ghana, Zambia and Malawi, claiming that as a multilateral lender it has preferred creditor status. Fitch pegged Afreximbank's non-performing loans at above 6%, while the bank itself reported an NPL ratio of 2.44% in the first half. 'The revision of risk management to 'weak' reflects low transparency in the recent reporting of loan performance relative to multilateral development bank peers and that Fitch's definition of NPLs differs from the bank's approach, which makes use of flexibilities offered by IFRS 9,' Fitch said. A lower credit rating can increase the borrowing cost for an issuer, which can in turn impact how much they can lend and at what rates. Fitch upgrades Pakistan's rating: macroeconomic stabilisation acknowledged Fitch attributed the negative outlook, which effectively puts the bank on downgrade watch, to the risk that some of its debt to sovereign borrowers might be included in restructuring. 'This would put pressure on our assessment of the bank's policy importance and heighten the risk associated with its strategy,' Fitch said. Afreximbank did not immediately comment on the downgrade.
Kuwait Times
14-05-2025
- Business
- Kuwait Times
Al-Ahli Bank of Kuwait Group holds Q1 2025 analyst conference call
ABK's diversified footprint continues to drive its growth momentum KUWAIT: Al-Ahli Bank of Kuwait (ABK) recently hosted its Q1 2025 analyst conference attended by Abdulla Al-Sumait, Acting Group Chief Executive Officer; Shiamak Soonawalla, Group Chief Finance Officer; Abdulaziz Jawad, Chief Strategy Officer; and Osama Ezzeldin, Assistant General Manager of Strategy and Follow Up. Al-Sumait began with discussing the financial highlights for Q1 2025. 'ABK achieved a healthy net profit growth of 8 percent to KD 15.7 million. Earnings per share remained stable at 5 fils, and our capital adequacy ratio stood robustly at 16.78 percent.' 'On the lending side, ABK's loan portfolio expanded by 10 percent year-on-year, supported by our disciplined credit underwriting standards. Asset quality remains strong, with our NPL ratio well controlled at 1.38 percent, reflecting our continued focus on maintaining strong asset quality,' Al-Sumait said. He added, 'Our diversified footprint continues to drive our growth momentum. Our international operations, including our UAE branches and ABK-Egypt, contributed a solid 40 percent of operating income and accounted for 37 percent of total assets, highlighting the strength of our regional diversification strategy.' Al-Sumait shared that ABK launched key strategic initiatives during the quarter to reinforce its competitive advantage and enhance customer experience. Major achievements in Q1 2025 included the launch of its new mobile banking app in Kuwait, featuring enhanced features and a new design, the introduction of a free international call service for customer support, and an enhanced customer service model with virtual service available in branches. He concluded, 'As we look ahead, ABK remains focused on delivering sustainable, long-term value. We will continue to pursue strategic expansion opportunities, strengthen our regional presence, and introduce innovative financial solutions tailored to meet the evolving needs of our customers.' ABK's Chief Strategy Officer Abdulaziz Jawad ABK Group CFO Shiamak Soonawalla Financial indicators On his part, Soonawalla discussed ABK's financial highlights for Q1 2025. He said, 'We achieved a healthy net profit growth of 8 percent year-on-year, with KD 15.7 million net profit attributable to shareholders. Earnings per share remained stable at 5 fils, and our operating income for the period reached KD 50.4 million, while operating profit stood at KD 29.3 million. This was supported by proactive cost management and continued revenue momentum across business lines.' ABK's asset quality remains robust, with the Group's non-performing loan (NPL) ratio maintained at a healthy 1.38 percent. The Group's loan loss coverage ratio held firm at 433 percent, confirming strong credit quality. Furthermore, provisions exceeded the IFRS 9 requirements, in accordance with Central Bank of Kuwait guidelines, as ABK continues to apply a prudent provisioning policy. Soonawalla added, 'We managed to maintain our net interest margin at 2.1 percent levels, although operating income marginally declined due to funding cost pressures and lower fees and commission income. Return on Average Equity (ROAE) delivered a healthy 8.1 percent, underlining ABK's strength in sustaining returns and driving long-term shareholder value. Liquidity continues to be a key strength for us, as evidenced by a liquidity coverage ratio of 255 percent and a net stable funding ratio of 109 percent, both comfortably above regulatory thresholds. Customer deposits remained resilient, totaling KD 4.4 billion, which represents 66 percent of our total liabilities. This further reinforces the strength and stability of our funding base.' He highlighted that the Group's strong start to 2025 reflects ABK's effective execution of strategic priorities and the leveraging of our core banking franchise alongside diversified income streams to drive sustainable growth. Notably, operating profit grew by 5 percent, highlighting the Group's enhanced operational efficiency. Commercial Banking remained the largest contributor to our operating income during the quarter, accounting for 49 percent, followed by Retail Banking at 39 percent, and Treasury and Investments at 12 percent. Our asset allocation remains strategically balanced, with 55 percent allocated to Commercial Banking, 12 percent to Retail Banking, and 33 percent to Treasury and Investments. He added, 'Our focus on operational excellence, digital transformation, and strategic investments continues to yield meaningful improvements. During Q1 2025, ABK's cost-to-income ratio significantly improved to 41.9 percent, down from 46.4 percent year-on-year, reflecting greater efficiency and disciplined cost management across the Group. As of Q1 2025, total assets expanded to KD 7.4 billion, delivering strong year-on-year growth of 13 percent. Net loans and advances increased by 10 percent to KD 4.7 billion, demonstrating healthy lending activity and prudent balance sheet expansion.' Soonawalla closed, 'Our Q1 2025 results highlight our solid profitability, disciplined risk management, and strengthened balance sheet. ABK remains firmly positioned to deliver sustainable growth and create enduring value for shareholders. With a strong foundation and a clear strategic focus, we are confident in our ability to sustain momentum throughout 2025.' The local and global economy Jawad mentioned that the sharp escalation in trade tensions and high policy uncertainty are expected to weigh heavily on global economic activity. According to the latest IMF projections, global GDP growth is now projected at 2.8 percent in 2025 and 3.0 percent in 2026. This marks a downward revision from the earlier forecast of 3.3 percent for both years. Global headline inflation is expected to decline at a slightly slower pace than what was expected in January, reaching 4.3 percent in 2025 and 3.6 percent in 2026. When it comes to Kuwait, the IMF has revised its 2025 GDP growth forecast for Kuwait to 1.9 percent. The adjustment reflects a more measured recovery pace, although domestic demand remains strong and oil output continues to recover. Inflation is expected to stabilize at 2.5 percent, supported by effective monetary policy by the Central Bank of Kuwait. Jawad highlighted, 'In March, Kuwait introduced a new public debt law, setting a borrowing ceiling of KD 30 billion and permitting the issuance of financial instruments with maturities up to 50 years. The move aims to strengthen financial stability, support Kuwait Vision 2035, diversify funding sources, and enhance Kuwait's position as a regional financial hub.' Exceptional results Jawad continued, 'Our strategic focus continues to be on salaried Kuwaitis and high-income expatriates, while placing growing emphasis on youth, who represent the future. We are continuously enhancing our youth offering to further strengthen our overall value proposition. As a result, our retail loan portfolio grew 1.75 times faster than the market in Q1 2025. We also enhanced our cards portfolio with a new prepaid card featuring a dual rewards program.' Furthermore, he affirmed, 'ABK maintains strong credit ratings of 'A' from Fitch and 'A2' from Moody's, reflecting its robust financial position, prudent risk management, and commitment to long-term stability.' Egypt and the UAE Regarding Egypt's macroeconomic landscape, the country is making progress on its macro-economic reform agenda despite regional challenges. The IMF completed the fourth review of Egypt's Extended Fund Facility (EFF), disbursing $1.2 billion and approved an additional $1.3 billion under the Resilience and Sustainability Facility (RSF). Although Egypt's inflation rose slightly to 13.9 percent in April 2025, up from 13.6 percent in March, the rise remains in line with market expectations, reflecting stability despite seasonal demand pressure. GDP growth accelerated to 4.3 percent in Q2 FY 2024/25. Moving on, Jawad shed light on the UAE stating, 'ABK, through its DIFC branch, has successfully closed a landmark $1 billion global syndicated term loan facility for a period of over three years, marking its largest debt facility to date. This significant achievement affirms ABK's robust standing in the financial markets.' The syndication was initially launched at $750 million; however, due to excessive oversubscription by 60 percent, the facility was upsized to $1 billion. This positive response highlights the strong liquidity position and confidence that both regional and international lenders, including those from the Middle East, US, Europe, and Asia, have in ABK. Jawad affirmed, 'This achievement reflects the trust and confidence that our lenders have in our financial stability and strategic vision. We are committed to utilizing these funds to enhance our service offerings and continue to foster sustainable growth.' 'Alongside our funding activities, ABK-UAE continued to advance its strategic agenda in the real estate sector. As a continuation of our Q4 2024 update, ABK-UAE successfully onboarded its first real estate escrow customer, marking a key milestone as the first Kuwaiti bank to offer this service in the UAE. With additional clients in the pipeline, we are now assessing the extension of these services to Abu Dhabi. This aligns with our strategy to strengthen our footprint and competitiveness in the UAE financial sector,' Jawad continued. Complementing the real estate escrow rollout, a dedicated UAE mortgage service for Private Banking clients in Kuwait was also launched. To enhance this service, real estate brokers are being brought on board as key partners, ensuring a more streamlined client experience. ESG ABK continued to build momentum around its ESG agenda, laying the groundwork for future initiatives and enhancements. The Bank remains committed to further integrating ESG principles into key business areas. Looking ahead, ABK plans to publish its updated sustainability report, assess its ESG maturity, strengthen internal capabilities, and explore opportunities that support sustainable value creation. Building on a strong start to 2025, ABK remains committed to accelerating momentum, executing its strategic agenda with discipline, and creating long-term shareholder value.
