If you ask what time it is in Zambia, one school of thought will answer a few days to the polls, well yes but for the banking sector it’s the earnings season. Shareholders of Zambia’s largest indigenous bank Zambia National Commercial Bank Plc (ZANACO) will be looking forward to next years Annual General Meeting – AGM because with barely a year of leadership on her clock, Mukwandi Chibesakunda has steered the Financial Institution (FI) to record highs in the copper producers market. According to 1H20 financial results published in the media, the Lusaka Securities Exchange – LuSE listed FI (ISIN:ZM0000000250) reported a K472.2 million (x3.8 amplification of 1H20’s earnings). This exceeds the banks FY20 after tax profits by 125.1% and a level that no FI has flirted with in history save Stanbic Zambia which is a few thousands of Kwacha ahead.
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Leveraging off scale of a client base north of a million, the big strong reliable bank has at half year demonstrated income leadership in aggregate with an 83.0% growth to K1.74 million supported by doubled interest income growth and strong performance in the fee and currency sales lines which expanded 37.0%.
Zambia National Commercial Bank Plc Chief Executive Officer – Mukwandi Chibesakunda.
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“We have people behind our numbers. We are eternally grateful to our clientele, management, staff and strategic partners including the board of directors for commitment to delivery that has resulted in this stellar performance. We will contintue on this great trajectory through continuous improvements and innovations into the future.”
Zambia National Commercial Bank Plc CEO – Mukwandi Chibesakunda
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Despite grappling with a thick cost layer that grew 34.0% to just over a billion Kwacha, the FI reflected a cost to income (CTI) ratio of 59.0%, a significant improvement from 1Q21’s 63.0% signalling cost efficiencies with a cue taken from a wider income growth.
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The bank has invested significantly in technology innovations that are paying off through evident efficiencies and have leap frogged the FI to new highs while simulataneoulsy building continuous strategic partnerships in key economic growth sectors such as agriculture and the SME with partners such as the GIZ and government ministries for food security program purposes. These have eased the bank the extra mile push in profitability. As for Sustainable Responsible Investment (SRI) Zanaco has in the pandemic period joined other private sector players in complementing efforts of national healthcare authorities in the fight against COVID19 through financing the purchase of respiratory equipment.
Zanaco’s 1H21 performance leaves shareholders and other stakeholders wagering what FY21 levels will be.
The Kwacha Arbitrageur