In accordance with IFRS 9, banks are expected to provide both for the incurred and expected credit losses. ‘’We expect higher provisional requirements to subdue profitability during the year across the banking sector on account of the tough business environment,’’ Cytonn said in its Q1 analysis of the banking sector. He explained that the true effects of Covid-19 on the banking sector will be reflected in the soon to be announced half-year results. This is going to hit hard the private sector and the general economy by larger extend,’’ Mukara said. He added that banks are likely to continue running to government securities despite low yields at the expense of the private sector, the engine of the country’s economy.

Source: The Star July 30, 2020 00:56 UTC