LUSAKA (The Business Telegraph) – Against all odds Atlas Mara Zambia Limited put up a stellar performance with a second quarter earnings rally surpassing all banks across the industry. Atlas Mara, a product of a successful acquisition of Finance Bank Zambia and subsequent consolidation of ATMA’s existing subsidiary BanABC Zambia in 2016, is now begining to reflect results of the amalgamation.
ATMA disrupts the traditional top 5 ranking. Atlas Mara’s 2Q20 after tax earnings sprinted to K69.5mln from merely above breaking even in the first quarter rallying its 1H20 to K71.2mln (PAT) morphing from an after tax loss of K12.3mln at 1H19 period. ATMA’s earnings disrupted the traditional top 5 performance rankings leaping the bank straight to fourth best performer in an 18 bank industry.
Income growth on a steady trajectory. On an annual basis the bank grew its total income by 42.5% to K414.2mln on an annual basis and 34% in 2Q20 compared to 1Q20. This was supported by 122.0% growth in its foreign exchange trading lines to K103.0mln and 11.8% growth in fee and commission income to K98.6mln. ATMA’s interest income line grew 44.6% higher to K428.0mln on the back of advances aligned to a 50.0% credit book expansion to just under three yards a year ago. Mark to Market – MTM gains gave its interest rate trading income a leap as treasury bill yields in the quarter rallied on the back of excess market liquidity.
Higher interest and non interest cost. Despite strong revenue lines, the bank reflects a higher interest cost of K225.6mln revealed by a higher cost of deposits. Non interest expenses remain elevated at K342.5mln contributing to ATMA’s high cost to income ratio of 85.0%. With a bit of fine tuning on the cost drivers or a higher revenues, ATMAs bottom line has immense potential to cause even further disruption in the sector.
The second quarter performance has revealed the synergy effects of the 2016 amalgamation transaction that saw the acquisition of Finance Bank Zambia by London Stock Exchange listed Atlas Mara leading to the merging of its subsidiary BancABC with Finance Bank Zambia. The Zambian market will eagerly wait to see the effects of similar transactions potentially on the horizon for the market involving Access Bank and Cavmont Capital Holdings Ltd.
The Kwacha Arbitrageur