With time decay, the amalgamation (M&A) transaction between BancABC and Finance Bank is evidently paying off. Atlas Mara Zambia first quarter performance has revealed a cost efficient trajectory as cost to income ratio narrows sharply to 49.0% from 86.1% levels same time a year ago. Typical of mergers, costs in the previous periods were elevated but have started to ebb to optimal levels which is giving profitability a positive cue.
Atlas Mara marginally contained its non interest expenses after a 6.5% growth despite pandemic times that ideally would be expected to drive spend while interest expenses sagged 3.3%. These lean expense lines allowed for a wider earnings margin which in tandem with 205.0% growth in total headline earnings, rallied the banks bottom line to K116.5 million compared to K1.6 million a year ago.
Income continues to be supported by credit extension (as the advances book expanded by 43.0%) and interest rate trading in government securities which pushed interest income 48.0% higher as the 70.0% growth in non interest income was driven by forex exchange trading and fee collections.
Atlas Mara continues to disrupt the traditional earnings score board while leveraging off strong partnerships in its ever evolving ecosystem. Investment in technology as an enabler is one area the bank has placed immense importance as it seeks to offer transaction solutions to its clientele especially in pandemic times.
Zambia has seen interesting M&A activity in the last few months. Recently Nigeria’s banking giant Access Bank concluded takeover of AtlasMara’s 78.15% stake in Botswana’s fifth largest bank BancABC. Access bank has been aggressively widening its footprint in Africa with a recent takeover of Cavmont Bank Holding in Zambia. The recent clarity over BanABC allays speculations around Nigeria’s Access bank takeover of which Atlas Mara unit exactly. Atlas Mara Zambia’s performance over the last one year has seen increased profitability momentum under James Koni’s leadership. It remains in contention to be one of the top 5 banks in Africa’s copper producer.
The Kwacha Arbitrageur