ZANACO Bank has announced that it expects its earnings per share to be 29% lower at half-year 2019, according to a statement from its Board.
ZANACO becomes the latest LuSE listed company to announce weaker half-year results during a period that has seen inflation rise beyond the central bank’s target range of between 6 to 8% and the central bank raising the monetary policy rate to double digits in a tightened liquidity market.
“The Board of Directors of ZANACO Plc wishes to advise the Shareholders that for the period ending 30th June 2019, the basic earnings per share is expected to be 29% lower than that of the corresponding period last year for the Company”, read a statement issued by the bank’s Company Secretary, Kaluba Gloria Kaulung’ombe-Inampasa, on 26th September 2019 in Lusaka.
The bank reported that impairments were the reason for the weakened performance during the period under review on account of compliance with account standards. “This reduction is due to the decrease in profit after tax for the period mainly on account of additional impairments taken in the year in compliance with IFRS 9 requirements”.
Non-performing loans (NPL) was a challenge many banks suffered during the period prior to the second and third Monetary Policy Announcements of 2019. Private sector financing slowed down, according to the Central Bank. “The increase in impairments are driven by growth in the loan book as well as the continued clean-up of the loan book to allow for allocation of capital to new revenue-generating assets”. This means that despite the slowdown in credit growth, the bank is seeking out innovative ways of unlocking capital for its customers.