Banking sector profits jump to $181 million

Banking sector profits jump to $181 million
Published: 16 February 2017 (972 Views)

THE banking sector in Zimbabwe closed year 2016 with $181 million profits, recording a 42 percent increase from $127 million in 2015, the central bank reported.

In his 2017 Monetary Policy Statement presented yesterday, Reserve Bank of Zimbabwe (RBZ) Governor, Dr John Mangudya, attributed the banking sector profitability to lower loss provisions.

"The banking sector remained profitable during the year ended December 31, 2016, with an aggregate net profit of $181,06 million, an increase of 42,36 percent from $127,47 million reported for the corresponding period in 2015.

"The increase translated to improved average return on assets and return on equity from 2.07 percent and 11,03 percent, to 2,26 percent and 12,64 percent, respectively," he said.

Despite persistent cash shortages that dominated the whole of last year, the apex bank said all operating banking institutions recorded profits during the period ended December 31, 2016.

"The increase in profitability was largely driven by lower loan loss provisions in line with improving asset quality, lower interest expenses as well as continued realignment of cost structures at most institutions.

"Interest income continued to be the major income driver constituting 58,40 percent of total income of $1,05 billion for the period ended December 31, 2016 while salaries and employment benefits dominated total costs for banking institutions as they accounted for 42,53 percent of total banking sector costs," said Dr Mangudya.

He said banks continue to implement various measures to enhance their earnings capacity through embracing technology in banking, which was more cost efficient.

Meanwhile, total banking deposits increased by 6.10 percent from $6,14 billion as at September 30, 2016, to $6,51 billion as at December 31, 2016.

During the period under review, the average prudential liquidity ratio for the banking sector was 61,91 percent as at December 31, 2016, above the stipulated minimum regulatory requirement of 30 percent.

Dr Mangudya said RBZ would continue with efforts to implement measures aimed at addressing the liquidity challenges experienced by the banking sector last year. He expressed optimism that the opening up of the tobacco floors during the first quarter of 2017 will boost the country's foreign exchange earnings and improve the liquidity status.

He said credit growth in the banking sector remained subdued during 2016 with banking sector loans and advances marginally increasing from $3,65 billion reported as at September 30, 2016 to $3,69 billion as at December 31, 2016.

During the period under review, the RBZ boss said the level of non-performing loans (NPLs) declined from a peak of 20.45 percent in the ratio of NPLs to total loans to 7,87 percent as at December 31, 2016. He attributed this to combined impact of the various policy measures instituted by the bank.

"These measures include enhanced credit management systems and collection efforts as well as disposal of qualifying NPLs to the Zimbabwe Asset Management Company, among other measures," he said.

"The level of NPLs is expected to continue trending downwards in response to a number of holistic NPL resolution policy measures by the Reserve Bank aimed at fostering responsible borrowing culture including the establishment of a Credit Registry."



- chronicle

Tags: Banks, Profits, RBZ,
 0

You May Like These Videos

Comments

There are no comments.

Latest stories

'Fast-track vetting of ex-political detainees, war collaborators'

by Staff reporter | 18 October 2017 | 19 Views

Zanu-PF has unleashed terror

by Staff reporter | 18 October 2017 | 31 Views

Sacked Tshinga Dube bares soul

by Staff reporter | 18 October 2017 | 30 Views

China's Communist Party congress begins in Beijing

by BBC | 18 October 2017 | 20 Views

APA will ensure police and Army respect people's freedoms

by Stephen Jakes | 18 October 2017 | 19 Views

Mthwakazi Republic Party to launch manifesto

by Stephen Jakes | 18 October 2017 | 10 Views

War vets blast Mugabe over 'Dzakudzaku' appointment

by Stephen Jakes | 18 October 2017 | 23 Views

Biometric Voter Registration (BVR) process (Update 4)

by Stephen Jakes | 18 October 2017 | 23 Views

'Re-electing Mugabe means electing Grace'

by Stephen Jakes | 18 October 2017 | 16 Views

Epoch mine area destroyed by fire

by Stephen Jakes | 18 October 2017 | 16 Views

Zimbabwe projects balanced budget by 2020

by Staff reporter | 18 October 2017 | 33 Views

What is happening along Africa's eastern seaboard?

by Ian Scoones | 18 October 2017 | 34 Views

Tsvangirai contests $57,000 lawsuit

by Staff reporter | 18 October 2017 | 40 Views

BCC employees reject salary cuts

by Staff reporter | 18 October 2017 | 41 Views

'MDC-T bigwig prepared to dump politics, constituency'

by Staff reporter | 18 October 2017 | 53 Views

Zanu-PF official loses property in inferno

by Staff reporter | 18 October 2017 | 38 Views

Govt to upgrade Heroes Acre

by Staff reporter | 18 October 2017 | 33 Views

'Vote for Mugabe in next year's elections,' says church patron

by Staff reporter | 18 October 2017 | 38 Views

Man stabs brother over debt

by Staff reporter | 18 October 2017 | 34 Views

Bosso playesrs challenged to wear uniform with pride

by Staff reporter | 18 October 2017 | 37 Views

'Serial killer' ate victims' brains

by Staff reporter | 18 October 2017 | 47 Views

War veterans vow to thwart G40 at Zanu-PF congress

by Staff reporter | 18 October 2017 | 23 Views

Doctors mull retaliation after allowance cut

by Staff reporter | 18 October 2017 | 40 Views

Khupe backs down on her stance on MDC Alliance, meets Tsvangirai

by Staff reporter | 18 October 2017 | 39 Views

Woman dumps monitor lizard - uxamu - at busy shopping centre

by Staff reporter | 18 October 2017 | 52 Views

No beer price hikes

by Staff reporter | 18 October 2017 | 28 Views

Contractor seeks partners for $60m Egodini project

by Staff reporter | 18 October 2017 | 30 Views

Grace Mugabe files $1 million lawsuit against Lebanese businessman

by Staff reporter | 18 October 2017 | 34 Views

Cheat throws wife out of moving car

by Staff reporter | 18 October 2017 | 49 Views

Diarrhoea outbreak hits Gweru schools

by Staff reporter | 18 October 2017 | 22 Views

War vets rally behind Mutsvangwa

by Staff reporter | 18 October 2017 | 29 Views

'If US had been settled by blacks it would look like Zimbabwe'

by Staff reporter | 18 October 2017 | 20 Views

Mugabe, Grace bleed Zimbabwe dry

by Staff reporter | 18 October 2017 | 26 Views

Tsvangirai courts Mnangagwa

by Staff reporter | 18 October 2017 | 56 Views