Verified domestic arrears stock balloons 6% to K14.7billion – Mwanakatwe
Domestic arrears stock in Africa’s copper producer rose 5.7% to K14.7bn in Q3: 2018 from K13.9bn in Q1. This was confirmed by the Q3 fiscal performance brief.
The arrears stock is the main causer of the uptick in the commercial banking industry non-performing loan stock prudential limit breach. Current industry NPL ratio is 12.4% versus a 10% prudential threshold. A widening domestic arrears figure could put more pressure on commercial bank provisioning on the back of worsening credit quality of counterparty’s. This could reverse the improvements recorded in previous quarters
A significant amount of local corporates are heavy on balance sheet receivables on account of delayed payments from either the state of state owned entities. The MinFin has committed to an aggressive arrears dismantling program to help mitigate the risks that could transmit to the banking sector.
More articles on Zambia’s domestic arrear stock.