First National Bank makes Bounces Back after Credit Impairments almost wiped its First Half Earnings
FIRST National Bank of Zambia bounced back with ZMW43.6million Q3 earnings from ZMW6.05million in H1: 2017 after credit impairments – on both the retail and corporate side – for Q2 almost wiped the banks earnings. FNBs YTD earnings as at 30 Sep. quadrupled to ZMW49.68million from ZMW6.05million. Ceteris paribus FNB would have been had earnings in excess of ZMW100million by Q3.
Contributors to the Q3 earnings was an impairment write back of ZMW12million and a lean interest expense line of ZMW67million representing a 19.69% decline from ZMW84.3million in Q2 while interest income slid 5.91% to ZMW159million from ZMW169.6million in Q2. The bank had fairly decent non-interest income levels of ZMW99million.
“First National Bank performance for Q3 is bullish especially after the H1: 2017 experience when credit impairments almost wiped out the banks earnings. The bank at the time made some reclassifications on its credit portfolio resulting in additional provisioning for potential defaults. Despite a significant provision raised in Q2 the bank has reported write backs of 28% of the ZMW42million as at half year, that have cushioned is earnings for Q3.”
FIRST National Bank of Zambia bounced back with ZMW43.6million Q3 earnings from ZMW6.05million in H1: 2017 after credit impairments – on both the retail and corporate side – for Q2 almost wiped the banks earnings. FNBs YTD earnings as at 30 Sep. quadrupled to ZMW49.68million from ZMW6.05million. Ceteris paribus FNB would have been had earnings in excess of ZMW100million by Q3.
Contributors to the Q3 earnings was an impairment write back of ZMW12million and a lean interest expense line of ZMW67million representing a 19.69% decline from ZMW84.3million in Q2 while interest income slid 5.91% to ZMW159million from ZMW169.6million in Q2. The bank had fairly decent non-interest income levels of ZMW99million.
“First National Bank performance for Q3 is bullish especially after the H1: 2017 experience when credit impairments almost wiped out the banks earnings. The bank at the time made some reclassifications on its credit portfolio resulting in additional provisioning for potential defaults. Despite a significant provision raised in Q2 the bank has reported write backs of 28% of the ZMW42million as at half year, that have cushioned is earnings for Q3.”
The Q3 financials for the banks so far published signal a recovery from the autopsy of liquidity stress experienced last year which forced most banks to book expensive liabilities which have clearly fallen off the books. Industry impairments for most locally registered banks are still high and as reported by Dr Ng’andu to the parliamentary committee last week, (5) banks have 50% of their books impaired. This has contributed to the 12.4% industry impairment levels in breach of the 10% threshold. FNB still remains a resilient bank in the Zambian market.
Other commercial banks such as Barclay, Citi Bank and Zambia National Commercial Banks are expected to release their results in the week.