Local banks capitalisation hits K5.9tn—IMF
The banking sector’s total market capitalisation has doubled to K5.9 trillion as at end June 2023, exceeding banking sector total assets of K4.1 trillion, published International Monetary Fund (IMF) data shows.
This is a rise from the K2.7 trillion recorded at the end of June 2022.
According to the data, profit-after-tax increased by 95 percent year-on-year to K124 billion at the end of June 2023, representing one percent of the gross domestic product.
In its recent country analysis, IMF observed that the sector remains stable and profitable, though exposure to government securities continues to increase.
Reads the analysis in part: “The sector remains financially sound with adequate capital, strong earnings and sufficient liquidity despite deterioration in asset quality.”
Growth in income was largely due to a rise in interest income, as the banking sector balance sheet structure continues to be dominated by investments and securities, representing 48 percent of total assets.
Bridgepath Capital Limited chief executive officer Emmanuel Chokani in an earlier interview said profits banks are registering are being buoyed by non-interest income, but mostly government business.
He said: “The high interest rate environment despite risks of credit impairment are leading to better bank performances while government securities yields which banks are investing in are also providing significant income.”
There are eight banks in country and in terms of market share, two banks are dominant, accounting for 46 percent of sector-wide assets, according to the IMF data.
