Atlas Mara Zambia’s profits double in the first half of 2020

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  • The group’s Net interest income upped 4% HY
  • Non-funded income jumped 37% as it came in at ZMW227 million HY
  • Banking unit suffered a loss on decreased transactional volumes on COVID19
  • Group’s loan book benefited from govt stimulus activities

Lusaka Stock Exchange (LUSE) listed financial services group Atlas Mara posted a strong set of results as its bottom line doubled over the 6 month period to 30 June 2020. The resilient performance comes against the backdrop of the impact of the pandemic on trade and a weakening Zambian economy.

The group’s Net Interest Income upped 4% for the half-year to ZMW203 million (USD10.5 M) from ZMW196 million recorded in the comparative period of 2019, steered by the group’s banking unit- African Banking Corporation Zambia, which reported a 13% growth in Interest Income to a figure of ZMW177 million, contributing over 85% to the group’s revenue.

Feeding the narrative was increased government economic stimulus in the face of COVID19 which disrupted normalcy of business. Resultantly the group’s loan book mounted 44%  owing to a loan issued to the Ministry of finance under the farmer support program.

The Company Secretary, Sandra Malupande on Tuesday further shed light on the group’s growth in borrowings:

“The Groups borrowings have grown by 167% attributed to the intake from third party lines under TDB (ZMW 727 million) and the Funds from Bank of Zambia (ZMW 533 million) to support the COVID 19 support program.”

Bolstering the group’s performance was a sterling outturn in non-funded income as it came in at ZMW227 million, a 37% jump from the prior year comparative period figure.

Atlas Mara’s banking unit suffered from decreased transactional volumes because of the pandemic as it reported a loss of ZMW442 million for the half-year, a 354% plunge from a profit of ZMW174 in 2019-HY.

However, the group’s Profit After Tax (PAT) surged 155% to ZMW14.3 million (USD737 M) from ZMW5.6 million (USD 288.8 M) reported for the half-year ended June 2019, offsetting the bank’s losses.

The kwacha has weakened more than 30% against the U.S. dollar so far this year, with the central bank in attributing the depreciation to macroeconomic challenges associated with debt service and debt levels. Zambia has $3 billion of Eurobonds outstanding and owes $2 billion to commercial banks, $2 billion to the International Monetary Fund and World Bank, and a further $3 billion to China.

Atlas Mara Corporation Limited Zambia is a subsidiary of the London listed Atlas Mara Group which has operations in 5 African countries through Banc ABC. In Zambia, The group comprises the bank,” African Banking Corporation Zambia Limited” and its subsidiaries: ABC Investment Services Limited and Micro Finance Zambia Limited.

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