By BUUMBA CHIMBULU
ZAMBIA’S banking industry remains fairly well capitalised and operationally resilient despite the turbulence in the foreign exchange market in dollar scarcity and sovereign strains.
The digitisation curve has and is expected to drive competitiveness in 2021 with many players with cards under their sleeves waiting to unleash.
Results for the first quarter of 2021 has seen more banks in positive earning zone while risk themes identified gravitate around investment in shorter dated assets such as treasury bills, says the Kwacha Arbitrageur Magazine.
According to an analysis by the Magazine, players remained cautious about duration risk while having appetite for local currency denominated sovereign deals such as Farmers Input Support Programme (FISP) whose participation had increased with a three times bigger budget pronounced by the authorities.
It indicated that first quarter financial results for banks in Zambia signalled appetite for sovereign deals and a risk skew towards shorter dated higher yielding assets inferred from income decomposition, asset and aftertax earnings growth.
“Despite commencing the year with healthcare concerns on the back of a second ferocious Coviud-19 strain, the banking sector showed resilience.
“Zambia’s outlook with rising copper prices and an IMF deal to be signed soon will improve risk appetite across the sectors which could see risk grades for International Financial Reporting Standard (IFRS9) compliant banks ease and at this point profitability will unwind,” the magazine indicated.
Zambia largest indigenous bank Zanaco Plc demonstrated income leadership across almost all lines, save foreign exchange trading, growing by 65.0 percent to K815.5 million while Stanbic Bank rallied behind at K703.3 million with Absa, First National Bank and Atlas Mara making it to the top 5 income earners score board.
Stanbic led the foreign exchange trading revenue curve with an 80.5 percent climb to K186.3 million with Absa, Zanaco, Atlas Mara and FNB rallying behind at levels close to half its competitor levels respectively.
A fair share of income growth was seen in the top five banks attributed to competitiveness in both corporate and retail products.
