Zanaco bank after tax earnings ebb 58% higher as credit growth soars 22%

Lusaka Securities Exchange (LuSE) listed Zanaco PLC posted strong FY19 after tax earnings growth of 57.9% to K231.24million pushing it to third place on the profitability 18 bank scoreboard. The banks total income grew 18.1% to K1.58billion propelled by strong interest income earnings from a 14.2% jump in margins on loans and advances to K758.1million and a softer 4% rise in income line from investment in government securities to K553.84 reflecting higher paying yields on the Kwacha yield curve. 

Elevated yield curve pushing higher funding costs. A rising cost of funds reflected in 28.6% ebbing of interest paid on deposits to K399.65million offset by a significant easing in credit impairments to K13.63million from K132.52million a year ago. 

Unwarranted fees eradication weighs. Non interest income line expanded 20.1% to K694.72million supported by an 11.9% slide in fees and commission collections to K445.95million as effects of eradication of unwarranted fees weighed in, backed by an impressive 73% levitation in foreign exchange trading income to K175.23million. 

Aggressive credit growth. Zanaco Plc’s credit book grew an aggressive 21.7% to K4.92billion as its total asset size expanded 13.2% to K11.89billion. 

Big Strong and Reliable. Zanaco bank has been on aggressive path to regain its digital bank glory initiated in the late 90s. The bank has widened its opportunity net to key products such as village banking, malaiti yabwela and a wide range of Small to Medium sized Enterprise (SME) offerings. These have been, outgoing Managing Director Henk Mulders passion as he steers the bank towards stronger partnership in the nations growth and developmental agenda with stronger focus on sectors that are deemed risky by most traditional market players. Zanaco’s digital momentum has increased arising from not only the appetite for financial inclusion but from the need to keep abreast with bringing the entire bank into citizens pockets through enhanced transact-ability.  

Zanaco’s balance sheet is, if not the most efficient churning out very sizable interest income. At this rate, with a lean impairment inventory, the bank is a testament of a successful clean up from previous years and is ready to compete aggressively with the countries top banks.

The Kwacha Arbitrageur