Stanbic Zambia’s Quarterly Earnings Leap Remarkably by 66%
STANBIC Bank Zambia’s quarter on quarter earnings remarkably leaped by 66% to ZMW83.17million from ZMW50.13million in Q2 bringing its YTD earnings to ZMW189.977million. The ZMW10brillion balance sheet was able to generate an annualised Return on Equity – ROE of 19.66% compared to 17.4% in the previous quarter.
Key drivers of the banks stellar performance QoQ was asset growth which gave an adrenaline boost to the interest income lines which rose 6% to ZMW293.87million and trading revenues which rose by 8.8% to ZMW74.46million. This was offset by a 38.77% leaning of credit impairments and a 34% decline in interest paid on deposits. The bank has demonstrated market leadership in its foreign exchange and trading income lines which grew by 8.8%.
“This performance is barometric indicative of a bank that has successfully weathered the storm after the 2016 liquidity crunch that cost the bank expensive deposits.
To see the bank with an interest paid line on deposits decreasing by 34% to levels of ZMW 80million means most maturing costly deposits have fallen off the books allowing for repricing in this interest rate falling environment. Quarter three performance depicts a very strategic approach towards asset growth and credit risk management. At this rate, we forecast to see a bigger come back and stronger finish for the year in Q4.”
The bank was recently awarded a judgement against a client Savenda Management Ltd that saw the bank spared from paying $20million (Kwacha equivalent in damages). This was seen as a confidence booster to commercial banks in circumstances that could have sent shivers to financial institutions in the area of taking risk. The judiciary were seen to make a judgement in the best interests of the banking sector as driver of economic growth. Savenda have been given the right to appeal to the Supreme Court.
“Stanbic Bank Zambia commends the judiciary for ensuring that justice has been served. The judgment puts the banking industry back on track after a period of uncertainty, and with the recent Bank of Zambia reduction in base lending rates, borrowing is now becoming more affordable,” said Stanbic Bank Acting Chief Executive Helen Lubamba, who urged customers who were having problems meeting loan repayments to approach the bank for help.
Stanbic Bank is a bank that has made a footprint in mining, agriculture, construction and the small to medium sized enterprise sectors.