Zimbabwe’s banks make a killing despite tough economy


0

Zimbabwe banking sector is thriving despite the tough operating environment, with profitability and balance sheet significantly sound in the full year ended December 31, 2016, financial results from reporting banks show.

The analysis includes all banks except Steward Bank, which is yet to publish its financial results as it is a wholly-owned subsidiary of listed telecoms company, Econet Wireless, which is in its closed period in line with the ZSE listing rules.

Econet has a February year-end and is due to report by May.

The review covers 12 commercial banks, four building societies and one savings bank.

Total income for the reporting banks increased by 5 percent to $766.8 million for the year ended December 31, 2016 relative to $729.9 million in the previous year on the back of a surge in non-interest income.

Net interest income from banks’ core business did however decline by 4 percent to $381.4 million in the period from $397 million recorded in the previous year from reporting banks.

Building societies increased their contribution to total income to 16.3 percent compared to 14.91 percent previously while commercial banks’ contribution to total income declined to 79 percent in 2016 from 80.6 percent in the same period previously.

Savings bank, POSB also increased its contribution to 4.64 percent relative to the previous 4.5 percent.

CBZ, CABS and Stanbic posted the highest total income of $118.3 million, $101.7 million and $95.9 million respectively, which if combined account for 41.21 percent of the total income recorded by reporting banks.

Total profit after tax for the reporting banks increased by 37 percent to $165.9 million for the year ended 31 December 2016 relative to $121 million in the previous year.

In the period under review, commercial banks increased their contribution to the earnings base to about 66.65 percent compared to  64.35 percent previously while building societies contribution to aggregate profit after tax declined to 27.52 percent in 2016 from 29.12 percent in the same period previously.

The average return on equity (ROE) and return on assets (ROA) of the reporting banks for the full year ended December 31, 2016 was 11.94 percent  (8.87 percent  in FY 2015) and 2 percent  (1 percent in FY 2015) respectively.

Excluding National Building Society (NBS), ROE and ROA improved to 13.57 percent and 2.46 percent respectively.

Continued next page

(180 VIEWS)

Don't be shellfish... Please SHARETweet about this on Twitter
Twitter
Share on Facebook
Facebook
Share on LinkedIn
Linkedin
Email this to someone
email
Print this page
Print

Like it? Share with your friends!

0
The Insider

The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

0 Comments

Your email address will not be published. Required fields are marked *