Banking sector aggregate net profit more than doubles


ZIMBABWE’S banking sector aggregate net profit more than doubled to $86,09 million in the period ending September 30, spurred by an increase in deposits and loans, an executive with the Reserve Bank of Zimbabwe (RBZ) has said.


In the same period last year, aggregate net profit was $24,35 million.

Norman Mataruka, RBZ director for bank supervision, yesterday told guests attending the Zimbabwe Independent Banks and Banking Survey 2015 that total banking sector deposits and loans amounted to $5,5 billion and $4 billion respectively.

“As at 30 September 2015, the banking sector had a strong liquidity position, with an aggregate prudential liquidity ratio of 43,13%, against regulatory minimum of requirement of 30%,” he said.

Mataruka said the banking sector was adequately capitalised with a capital base of $916,81 million as at September 30, 2015 and a capital adequacy ratio of 21,5%.

He said RBZ has requested banks to work towards a target non-performing loans (NPL) ratio of less than 10% by June 30, 2016 reaching 5% by December 31, 2016.

Reserve Bank of Zimbabwe director,bank supervision Norman Mataruka

“NPLs are expected to decrease further as banks have started disposing their loans to Zamco [Zimbabwe Asset Management Company],” he said.

Zamco is a special purpose vehicle created to buy secured NPLs from banks to free up their balance sheets.

Mataruka said asset quality was on an upward trend, as reflected by the ratio of NPLs to total loans of 14,27% as at September 30 from and a peak of 20,45% in June 2014.

Oxlink Capital (Private) Limited chief executive officer, Brains Muchemwa said the banking sector was entering a new phase, where banks that were not performing, would be pushed out of the market.

“From my perspective, I think we are now living in an era where it is going to be more difficult for banks to fail. Why? Because I think that most of the bad apples are out of the market anyway,” he said.

“I think there is still some bit of work to be done to ensure that there are sanctions for bankers that have got an appetite to play games with depositors’ funds.”

The survey was conducted systematically and objectively and has generated information to aid businesses in decision-making and managerial judgement.

Mataruka said banking institutions should continue to leverage on technology to improve operational efficiency.

He said banking efficiency, therefore, “provides scope to enhance financial stability through, among other factors, potential rise in savings and reduction in NPLs”.

The Banks and Banking Survey 2015 was a collaboration between the Zimbabwe Independent and Zanj Financial News.

Mataruka said the banking sector was safe and sound. Since the dollarisation of the economy in 2009, six banks — Royal, Trust, Genesis, Allied, AfrAsia and Interfin — were closed after RBZ found the institutions to be in an unsound position. The majority of the closed entities had the same ailment — high insider non-performing loans, weak corporate governance and abuse of depositors’ funds akin to declaration of a dividend to shareholders using deposits.