Zanaco bank grew its H1 revenues by 30.4% to K692.5million propelling its earnings after tax to K97million compared to a K26million loss, a year ago. The Lusaka Securities Exchange (LuSE) listed bank (ISIN:ZM0000000250) earned itself slot in the top 5 after interest and non interest income bulls. The red banks interest income rallied 12.8% to K652million while its non interest income took a 9.4% haircut to K264million a trend observed in the industry as an autopsy of abolishment of unwarranted fees. However Zanaco maintained second place in both revenue lines rallying behind Barclays and Stanbic banks respectively.
The big strong reliable bank grappled with non interest expenses, the widest in the industry at K541million which eroded its bottom line weighing the bank to fifth place within a radius of K5million from the third and fourth peers namely Barclays (K103million) and Bank of China (K102million). Zanaco’s cost to income ratio at 77% was the highest of the top 5 performing banks measured by after tax earnings.
Zanaco’s loan book continues to grow at a ferocious pace with H1 growth at 26% to K3.9billion, the second strongest momentum after Barclays 61% aggressive rally, as its depositor base expanded 11.7% to K8.4billion.
Henk Mulders strategy is very tactical as he focuses on not only asset growth focusing on small to medium sized enterprises and the agriculture sector but seeks to reincarnate Zanaco as the best player in the digital space as the bank advocates financial inclusion to every corner of Zambia. However the red bank faces competition following stanchart banks introduction of a digital bank. From the growth trajectory and the commitment to extend balance sheet to SMEs it is vivid that the big strong reliable bank has nowhere to go but stick to the local market because they are here to stay. However Zanaco executive management team will surely be rethinking and strategizing how to lean their non interest expenses that are widening their cost to income ratio costing the bank a wider bottom line to allow them to compete in the top 3. The banks H1 results reflect lower impairment figure of K9.5million compared to K170million last year.