Financial sector positive about expansion

By KELLY NJOMBO

THE Bankers Association of Zambia (BAZ) says the financial sector has remained positive on account of increased credit expansion to key sectors of the economy.

Currently, the total asset portfolio stands at over K62 billion.

BAZ chairperson Charles Mudiwa cited agriculture, transport and communication, manufacturing and forestry among other sectors as contributors to the stable financial sector.

Mr Mudiwa said the overall financial performance and condition of the commercial banking industry in Zambia has been stable and satisfactory in terms of profitability, lending and capitalisation levels.

“Generally, the banking sector has recorded a strong expansion in credit to most sectors, notably the agriculture, firstly, fishing, hunting, manufacturing and transport, others include communication and storage sectors,” he said in a speech read for him by BAZ chief executive officer Leonard Mwanza during the welcome cocktail for the second Annual Banking and Finance Conference last week.

The sectors balance sheet has also depicted a positive trend over the past five years.

“Over the last five years, the overall financial performance and condition of the commercial banking industry has been stable and satisfactory. By the end of June 2016, the total assets were recorded at K62, 193.6 million.

“And as at the end of June the same year, total liabilities and shareholders’ funds amounted to K53, 935.8 million and K8, 257.9 million respectively of which 70.2 percent of these funds were total deposits amounting to K43, 682.5 million,” Mr Mudiwa said.

With regards to trends that relate to lending activity, by the end of the first half of 2016, the commercial bank gross loans and advances reduced by 3.96 per cent to K25, 157.4 million from K26, 195.6 million in 2015.

He said the quality of total loans and advances has been satisfactory despite an increase in the continued account for the largest loans advances at an average of 25.7 percent between 2011 and June 2016 and this was followed by other sectors.