First Na­tional Bank makes Bounces Back af­ter Credit Im­pair­ments al­most wiped its First Half Earn­ings

Zambian Business Times - - FRONT PAGE -

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.

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