Banks in Zimbabwe reported aggregate profits of $4.55 trillion in the first six months of the year, predominantly fuelled by non-interest income which made up 92.51% of total income.
During the same time last year, banks recorded a profit of $181.25 billion.
Zimbabwe’s banking sector performance remained satisfactory, according to the Reserve Bank of Zimbabwe (RBZ)’s mid-term monetary policy statement, thanks to strong asset quality, sufficient liquidity and sustained profitability, among other factors.
“The banking sector continued to demonstrate resilience on the back of a broad range of complementary fiscal and monetary stabilisation measures, to foster and enhance price and financial stability,” said RBZ governor John Mangudya.
“Banking institutions continue to adapt to the dynamic operating environment by reconfiguring their business models, including the digitisation of banking services. This has gone a long way in providing convenient and modern banking services to the banking public, as well as fostering inclusivity.”
During the period under review, Zimbabwe’s banking sector was sufficiently capitalised, with all banks complying with tier 1 and minimum capital adequacy ratios of 8% and 12%, respectively.
Moreover, average capital adequacy and tier 1 ratios stood at 40.48% and 35.35%, News Day reports.
“The growth in core capital was mainly attributed to capitalisation of retained earnings. The retained earnings for some banking institutions are largely composed of revaluation gains from investment properties and translation gains from foreign exchange-denominated assets,” the RBZ governor added.
As at the end of June, 15 of 18 banking institutions reported core capital levels surpassing the minimum capital requirements.
In addition, aggregate banking sector loans and advances rose from $1.29 trillion on 31st December 2022 to $10.19 trillion on 30th June 2023.
“The increase was largely attributed to an increase in foreign currency-denominated loans, which constituted 94% of the sector’s loan book,” Mangudya said.
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Zimbabwe Dollar falls to record low ahead of currency announcement
The Zimbabwean currency has fallen to another all-time low as residents sought refuge in the stability of the US dollar amid speculation the central bank is on the verge of making an announcement regarding the future of the local currency.
posted on 03.04.2024
RBZ urges govt incentives on diaspora investments
Zimbabwe’s central bank, the Reserve Bank of Zimbabwe (RBZ), called on the government on Monday to provide fiscal and non-fiscal incentives to diaspora investments due to their massive contribution to total foreign currency inflows in the country.
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