• Stanbic Zambia Earnings QoQ slid by 11.56% to ZMW50.13million (ZMW56.68million);
  • Foreign Exchange earnings rose by 78% to ZMW68.43million (from ZMW38.47million);
  • Credit impairement rose to ZMW23.69million (from ZMW3.85million);
  • Interest income was marginally flat at ZMW278.37million;
  • Annualized return on equity – ROE delivered to shareholders was 17.4% (from 19.3% in Q1) ;

Stanbic Bank Zambia’s Quarter on Quarter earnings slid by 11.56% to ZMW50.13million (from ZMW56.68million). This translates to a ZMW106.81millon profit after tax earnings number year to date. With the size of its ZMW11bilion balance sheet the bank delivered a 17.4% annualized Return on Equity – ROE to its shareholders (compared to 19.3% in Q1:2017). This was a slight decline on account of a decrease in earnings.

Income statement credit impairements rose significantly to ZMW23.689million (from ZMW3.825million QoQ) as some counterpartys were reclassified as non-performing on account of market stress due to high interest rates. However the bank still demonstrated market leadership in foreign exchange earnings which grew by 78% to ZMW68.437million (from ZMW38.47million QoQ).

“Financial Performance Statements for Q2:2017 will reflect much of an autopsy of 2016 stress which commercial banks are still dealing with especially on credit impairements. Some counterpartys have undergone stress because they are owed arrears by government and this has made it burdensome for them to service their obligations. The economic slowdown cannot be ruled out completley as it’s made booking of new business a challenge for most banks reflecting in lower to stagnant asset growth sizes. Expensive deposits are still on the balance sheets of most commercial banks; the year 2017 should be a year to flush out these heavy weights so as to allow a better 2018. The expensive deposits will mature and fall off this year and only will the benefit of lower lending rates transmit to clients effectively. The market needs to breath.

Chintu Chinkuli a Financial Analyst said in a note.