The Zambia National Commercial Bank plc – ZANACO – which is majority owned by a Netherlands-based, international financial services provider, Rabo Financial Institutions Development B.V. (“Rabobank”) has posted a 34% (K1.3 billion) increase in total operating income when wholly locally owned bank Investrust bank has been declared insolvency to a tune of about K850 million.
The increase in total operating income is driven mainly by an increase in interest income by 22% (K850 million) supported by the growth of the loan book, 128% (K770 million) growth in treasury trading income.
According to the financials seen by the Zambian Business Times – ZBT, ZANACO closed the
year at K1.7 billion representing a 49% (K571 million) increase in profits.
In a statement signed by the Company Secretary Kaluba G Kaulun’ombe, the growth in profitability was driven by an increase in total operating income and astute management of costs and impairments.
“Efficient credit monitoring practices and focus on the origination of quality assets resulted in a notable decrease in impairments in the year by 88% from K186 million recorded in the prior year to K22 million as at the close of the 2023 financial year. Total operating expenses increased by 27% (K538 million) driven by the implementation of the Group’s strategic initiatives aimed at positioning the Bank to be future-fit.”
“The Group costs were also impacted by the depreciation of the local currency and inflationary increase. The notable growth in profitability was supported by a resilient balance sheet with a total asset base of K45 billion, with a year-on-year growth of 25%.”
Kaulun’ombe said the total assets mainly comprised of cash and balances with Bank of Zambia – K8.9 billion (year-on-year growth of 87%), Trading assets – K2.3 billion (year-on-year growth of 27%), loans and advances – K16.2 billion (year on year growth of 34%).
He said the growth in assets was mainly supported by the growth in customer deposits which grew by 14% year on year (K4.2 billion) closing the year with a deposit base of K33.9 billion.
“The growth in deposits is in line with the group’s strategy of growing deposits to increase funds available for investments. Total liabilities recorded a growth of 23% (K7.5 billion) which is mainly attributable to the growth in customer deposits 14% (K4.2 billion) and deposits from other Banks which grew by K1.9 billion.” He said.
