Zambia largest bank by asset size, Stanbic reported its first quarter after tax earnings 101% stronger at K157.8million year on year. This growth was 24.2% wider than fourth quarter performance of 2019 an earnings rally surpassing all it’s competitors.
Subsidiary to the largest Pan African bank Standard Bank, Stanbic Zambia grew its total income by 31.1% to K526million supported by bullish contribution from its lending and government security investment lines. Interest income rose 27.2% to K405.4million catapulted by a 27% expansion in advances and a 59.4% rally in investment income from bills and bonds.
Stanbic grew its credit book by 26.2% to K6.7billion in the quarter as it’s total asset size expanded 17.78% to K17.6billion.
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The bank further expanded its non-interest revenue line by a 50.3% margin to K206million leveraging off its foreign exchange trading market leadership that doubled its year on year contribution and a solid fee and commission income line.
Interest expenses ballooned 51% to K84.1million weighed by a higher cost of deposits that grew 64.2% while impairments were up a million Kwacha.
COVID amplification of credit risks. Credit risks remain fairly elevated for the macroeconomic environment as COVID pandemic weighs most counterparty’s in Zambia adding onto already existing structural issues. The central bank threw a K10billion life – line to commercial banks in Medium Term Lending Facility (MLTF) for 3-5years for onward lending, restructure or refinance to key sectors which Stanbic has announced it would be giving debt relief to some of its affected clients to allow them cushion effects of disease pandemic. Further, with downgrade risks by global rating agencies, credit appetite for the financial sector will continue to weigh banking sector performance.
Stanbic remains a key driver of Zambia’s growth having invested over $3billion in mining, agriculture, manufacturing and construction over the last decade.
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