BANKING SECTOR SOLID - RBZ

HARARE- Despite the economic challenges experienced in the country worsened by the Covid-19 pandemic, the local banking sector is in a sound position with key statistics pointing to a viable sector.

Figures on key indicators such as profitability and liquidity ratios from the Reserve Bank of Zimbabwe (RBZ) point to a sector that is stable with ability to withstand pressure.

“The banking sector is in a very sound position right and has been like this for some time now,” said RBZ deputy director economic research and policy division Dr Nebson Mupunga.

He was speaking during the Zimbabwe Finance Conference which was hosted by Financial

Markets Indaba (FMI) in conjunction with Business Weekly and sponsored by Nyaradzo Group.

“The sector is viable and profitable, our banks are able to stand extreme stress,” said Mupunga.

An overview of the sector, as of March 31, 2021 shows that local banks were well capitalised with average capital adequacy ratio of 30.04 percent, above the regulatory limit of 12 percent.

According to the RBZ, average non-performing loans (NPL) ratio is at 0.36 percent, which is well below the international benchmark of less than five percent.

Statistics from the central bank also show that the sector is viable and profitable as shown by positive profitability ratios with return on asset (ROA) at 0.97 percent while return on equity (ROE) stands at 5.9 percent.   – THE HERALD, Zimbabwe.