SBZ recorded bullish growth in most revenue metrics save the non interest lines which widened on restructure costs. The bank remains market leader in the trading income space despite currency risk and a bearish rate environment. Credit risk profile on recoveries improved on write backs improving earnings margin significantly.
Zambia’s largest lender by asset size, Stanbic Bank , started the year at a bullish pace, extending the momentum built in Q4 of 2018 with its earnings rallying 23% higher, to PAT levels of K78.82 million compared with K63.98 million a year ago). This was revealed by the quarterly financial statements as at 31 March 2019 in accordance with section 92 (1) of the BFS Act of 2017. Stanbic Bank Zambia – SBZ leads the earnings sprint with Barclays Bank – BBZ rallying in second place at K73.5 million while Standard Chartered Bank – SCB settled for third place with earnings of K69.5 million.
Total income widened by a margin of 19.77% to K401.02 million from K334.82 million propelled by a 30.36% uptick in interest income to K318.77 million supplementing a 23.88% narrowing in non interest revenues to K136.85 million (K179.79 million). Non interest revenue lines were weighed by a 10.6% weaker fees and commission generation to K83.26 million (K93.14 million) and a 36.77% underwater trading performance of K51.42 million (K81.34 million). Despite a slide in trading income expectations, SBZ remains market leader in the space with BBZ and SCB rallying in second and third place.
Other key drivers of interest revenues were a 36.36% increase interest income (from loans and advances) line to K185.89 million as the benefits of placements with other financial institutions earned the bank K28.59 million (a 279% rise in earnings).
Fees and commissions performance are subtly an autopsy of the central banks directive on unwarranted fees in Q4:2018 while the trading lines reflect the risk off currency and bearish interest rate trading environment in Q1.
Expenses were weighed by the non interest line which ballooned 26.5% to K274 million (K261.69 million) as the bank incurred costs on restructures to improve operational efficiencies. However this was marginally cushioned by a slower growth in interest expense by 7.94% to K55.68 million (K60.48 million).
Credit risk on the recoveries side was positive with write backs improving the earnings line to K1.1 million (-K29.05 million).
(The analysis is based on Q1:2019 versus Q1:2018)
