Stocks for the largest bank by asset size in Africa’s red metal producer are set for a positive cue after release of its full year 2022 prudential earnings results. Trading as ZM:ISIN0000000250 Zanaco stock has seen a rally that has made it the second best performer on the local bourse the Lusaka Securities Exchange (LuSE). Zambia National Commercial Bank’s FY22 financial performance reveals a new watermark high after its after tax earnings sprinted 28% to K1.35 billion.
With a clientele base north of 3.3 million the LuSE listed bank led the curve across all faculties ranging from income to customer deposits. Despite a 5% softer non-interest income to K1.5 billion, interest income had a compensating rally of 26% to K3.0 billion on the back of credit extension and lengthened duration. This supported the 14% total income growth to K4.5 billion translating to a return on equity to 41.3% despite cost to income ratio at 55.5%.
Tagged ‘big strong reliable’, Zanaco continues to be Zambia’s systemically important bank with participation in the red metal producers economic growth trajectory generating sectors ranging from agribusiness to SME. Credit portfolio growth soared the red bank’s book to K12 billion year on year supporting local growth across the key sectors.
In a note to clients Zatu Financial Consultants Managing Partner Munyumba Mutwale said, “Zanaco’s performance is a testimony of a local financial institution run by an indigenous management team that have delivered stellar performance in a 19 commercial bank industry that will make investors smile at this years annual general meeting. This performance reveals a well knit tact aligned to the times we are in, the digital era where ease of transactability is priority. The growth and future earnings are evident in the current stock performance. Zanaco is good stock to buy for those seeking real returns in the near to long term.”
This will be Mukwandi Chibesakunda’ s second straight year of ‘against the odds’ earnings with the debut being FY21 when Zanaco crossed the K1 billion after tax earnings mark.
DIGITIZATION, DEMOCRATISATION, DECENTRALISATION AND GREEN FINANCE
Zanaco is the only bank that has kept the pace of the 3D’s – democratization, decentralization and digitization which are core to the aggressive business expansion over the years. This has seen the ‘peoples bank’ widen its Xpress agency network as it supports financial inclusion through easing transactability while simultaneously creating employment. The vast clientele size has made integrations with Mobile network operators lucrative making Zanaco the only bank keeping up with the mobile money wave. The bank boasts of the largest Xpress agency network with north of 22,000 while its digital footprint continues to widen and strategic presence evident in the Southern African nation.
With a strong global decarbonization drive as the world gears to mitigate against climate risks, green financing is a growing area that Zanaco has taken the lead. It was the first Zambian bank at the United Nations COP26 climate conference setting the pace for its peers and is the only financial institution with Global Climate Finance certification.
Zanaco recently secured a $50 million line with British International Investment that will support climate smart, women led and small to medium sized businesses.
As at 4.30pm the Zanaco stock was trading for K3.2 per share from a recent high of K2.95, on track to price correction of circa K4.5 per share as forecast by analysts.
The Kwacha Arbitrageur
