Saturday, December 13, 2008

Mahtani warns of global financial crisis effects

Mahtani warns of global financial crisis effects
Written by Joan Chirwa
Saturday, December 13, 2008 9:00:28 AM

FINANCE Bank Zambia chairman Rajan Mahtani has said the current global financial crisis will impact on the bank’s ability to lend in the near future.

During the 2008 award giving ceremony for the bank’s staff in Lusaka on Tuesday, Mahtani said access to international capital would be scarce – driving costs of funds and local interest rates on the upward trend.

“This will in turn impact the ability to lend,” Mahtani said. “Whilst the managing director has shared more positive news about our performance this past year, it is incumbent on me as group chairman to share the reality of what is happening in our global markets with you and to colour our expectations for 2009.”

Mahtani said achieving the bank’s targets in 2009 would require commitment, solid business plans and dedication to action.

“If you compound the current global financial crisis with the anticipated liquidity challenges we will all face (due to a two pronged US dollar capital flight – from FDI on the one hand, to the copper mines requiring less US dollar “capital” funding) and the already rising inflation rate – then you will agree that 2009 is going to be a different experience to 2008,” Mahtani said. “I am also aware that there is a likely new entrant into the banking industry which posses yet another competitor threat in the form of intense competition. Success will depend entirely on our ability to compete for that business which does take place. So my call is that we need to be cautiously optimistic for 2009. Our plans must be written-up as ‘battle plans’ and we must then execute against them in a time of heightened competitor activity.”

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