CEMAC Credit institutions: COBAC calls for respect of standards

The economic capital of Cameroon hosted the 7th meeting between the president of the Banking Commission of Central Africa (COBAC), Lucas Abaga Nchama and executives of CEMAC credit institutions.

The meeting, held in Douala on Friday, was structured around three themes that have experienced remarkable mobilization. The second theme: "Utilization of credit institutions under the European Courts and related procedures" permitted by George Taty, Judge of the CEMAC Court of Justice and Djimasna N'doningar, Judge of the Common Court of Justice and Arbitration of the OHADA, who explained the conditions for referral of these two jurisdictions.

On the banking system of Cemac

Regarding the situation of the banking system, there was a growth of key aggregates. The President of Cobac said the aggregate total assets of the banks stood at FCFA 12,571 billion in March 2015. It was up 8.62% compared to March 31, 2014.

Deposits collected amounted to FCFA 9,944 billion or 79.10% of total assets increased by 6.51%. Gross loans amounted to FCFA 7,528 billion. They are up by 8.07% compared with the level of March 2014. It should be noted that the apparent quality of the portfolio has somewhat deteriorated.

Non-performing loans amounting to FCFA 894 billion at end-March 2015 are against FCFA 696 billion a year earlier. They represent 11.88% and 9.99% of gross loans at both dates. This point was traded in for last Friday's consultation. Surplus cash is FCFA 3.575 billion (28.44% of total assets). There was an increase of 4.25% compared to the situation that prevailed a year before.

Mixed performance

The President of Cobac however lamented that the prudential situation of the banking and financial system in the sub-region is mixed. Leaders of CEMAC's credit institutions were therefore invited to take the most appropriate steps to restore the compliance of their establishments with regard to regulation.

Otherwise, warned Lucas Abaga Nchama, COBAC will spare no effort to make the sanctions whenever it deems necessary. The challenge is to ensure the stability of the banking system of CEMAC. Lucas Abaga Nchama conveniently recalled the need to continue this meeting as a framework for exchanges and analysis between the banking regulator and the subject. It is moreover necessary to promote the soundness and stability of the banking system of the CEMAC.

On growth forecasts

Lucas Abaga Nchama said a word about the global economy and the economic outlook revised at CEMAC. It was thus learned at the level of the sub-region, that economic performance in 2014 was better than in 2013 but below initial forecasts.

The vitality of the non-oil sector and the recovery of oil production are largely the factors behind this performance. One can also observe an increase in the area of growth rate to 4.4% in 2014 springing against 1.6% in 2013, despite the resurgence of inflationary pressures when inflation stood at 3.2%, 2% against a year earlier.