The negative outlook reflects the negative impact of the pandemic on MCB's operating environment and the resulting downside risks to the bank's financial profile, in particular asset quality and profitability. ...."Single-borrower credit concentrations are high, with the largest 20 grouped exposures (including funded and unfunded exposures) amounting to 200% of total equity at September 2020."
But MCB still has a strong franchise, adequate risk management as well as a generally solid financial profile. However, the forecast of depressed profitability metrics for the MCB means that we will have to continue relying on the MIC not only to provide support to companies facing liquidity problem but also to sustain our main sectors?
Can we afford it ? And at what cost ?
We are transferring the risks from the private to the public sector.
And MCB has a huge responsibility in the exposures of these 20 top companies. This is now being transferred to us tax payers to manage ! That's Payadachy's new normal "where profits are privatised and losses are socialized”.
Does he have an internally consistent economic plan to tackle the economic and financial fallout from the coronavirus pandemic ? We doubt it !!!
As i had pointed out in my article "Are we sitting on a financial time-bomb ?", unless there is an effective response to the looming risks and threats, we could be staring at a financial crisis of unprecedented magnitude.
