Cost efficiency continues to consecrate commercial banking performance over and above revenue generating capacity. In 3Q21 financial earnings releases in the local press, Stanbic Bank Zambia led the market after tax earnings curve by an exceptional positive jaws reflecting cost efficiency. The blue banks after tax profits scaled 102% to K729.6 million, a new profitability market watermark aided by stellar revenue generation across the various lines supported by a softer cost growth pace of 15% versus a year ago same period.
FINE WINE PARADOX AS COST EFFICIENCY WIDENS MARGINS
The say wine tastes better with age, Stanbic cost to income ratio, with time decay, leaned significantly to 45.7% from 55.3% (a year ago) versus 46.1% in 2Q21. This could reflect a tighter operational cost environment and cautious spend in the period.
Credit book growth quickened 27.7% but was only adequate enough to scale the balance sheet to second largest in the market. The bank nonetheless retained market traditional leadership in foreign exchange trading being the largest player in the copper producers market while earnings in other lines were exceptionally healthy.
C-SUITE RE-ORGANIZATION WITH STRATEGIC INTENT
A business reorganization in the C-suite took place as part of a future ready transformation readying the bank for a greater digital strategy while Leina Gabaraane’s term came to an end as he moved on to a Regional role within the group and was succeeded by a seasoned accountant Mwindwa Siakalima as Chief Executive (CE) that previously served as Chief Finance and Value Management Officer (CFVMO) prior. The future ready transformation is an autopsy of the pandemic which has accelerated digital transformation and thereby occasioning a business split into Wholesale Clients, Client Solutions, Commercial and Business Clients and Consumer & High Networth Clients respectively all with representation at C- Suite level.
WHAT NO EYE HAS SEEN NOR EAR HEARD IN THE EARNINGS FACULTY
At this earnings momentum Stanbic could highly likely be flirting with a year end after tax profit a few Kwacha’s shy of a yard. The bank continues to demonstrate that Zambia is its home and therefore is driving her growth through various financing initiatives across the key sectors.
The Kwacha Arbitrageur
