- Operating income increased by 37%
- Total assets grew by 30%
- Loan book grew by 24%
Harare – Zambia National Commercial Bank (ZANACO) posted a positive performance for the six months period ended 30 June 2020 amid a tough operating environment.
In a half year results publication, the bank said operating income grew by 37 percent to K982 million from the same period last year.
ZANACO attributed the growth to strong performance from its lending and trading activities where the bank assumed market leadership.
Income from lending grew by 32 percent to K493m while trading income grew by 317 percent to K196m from H1 last year.
The Bank achieved strong balance sheet growth with total assets at K13,564m, a growth of 30 percent from H1 2019 while deposits grew by 30 percent to K10,918m.
Likewise, the loan book grew by 24 percent to K4,761m and despite the growth in the loan book, asset quality has been maintained with a Non-performing loans ratio (NPL ratio) of 9.6% which is lower than the peer average
Meanwhile, the bank added that net profit for the period stood at K62 million representing a net margin of 6 percent, down from 9 percent in 2019.
This was mainly due to cost inflation resulting from a weakened Kwacha, coupled with the restructuring activities aimed at improving long-term efficiencies and performance, creating sustainable growth and stability, and ultimately increasing value and optimising return for our shareholders.
The bank said it remained adequately capitalized to support the business strategy and met regulatory requirements at all times as the bank’s capital adequacy ratio as at 30 June 2020 stood at 13% after allowing for payment of an annual dividend of K75.1m.
On the outlook, the bank said, “The effects of the coronavirus on the economy and society pose the largest threat to the future performance of the Group. Therefore, it is closely monitoring developments in the environment emanating from the pandemic to avert risks and identify opportunities. Our performance so far in this tough environment validates our chosen strategy. We will continue to invest in enhancing our customers’ experience and restructuring operations to increase long- term efficiency and sustainability.”
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