The Bankers Royal Rumble – Q3 2019
Banking, Stanbic, Standchart, ZANACO plc

As the third quarter of the year comes to an end, management teams are strongly reviewing their strategies to determine how well they are performing against their annual budgets and whether they will meet their targets by year-end.

The Bank of Zambia reports that GDP growth is at 2%, with inflation at 10.7% and MPR at 10.25% as at October 2019 thus highlighting that the Zambian economy is currently unstable, making it quite hard for commercial banks to thrive easily.

A week ago, the press released financial statements for the 03rd quarter of 2019 (Q3 2019) and we review the top 4 banks as below:

  1. Stanbic Bank has maintained 01st position across most earning metrics, standing out as Zambia’s largest bank reporting an asset size of (ZMW 14.9b) with deposits worth (ZMW 11.9b) and Loans & advances of (ZMW 5.5b).

Strategy wise – Stanbic performed successful credit impairment writebacks this quarter contributing to its great performance yielding Profit After Tax (PAT) of (ZMW 156m) for Q3.

Year on Year (YoY), Stanbic’s PAT grew by over 100% from (ZMW 155m) in Q3 2018 to (ZMW 322m) in Q3 2019 thus scooping the trophy for most profitable bank. It is anticipated that Stanbic will close the year with PAT above ZMW 400m, being the 01st bank in the history of Zambia to bag such profits following Standard Chartered Bank’s ZMW 361m in 2016.


  1. Barclays Bank came 02nd in the PAT marathon bagging (ZMW 199m) YTD, (making ZMW 120m less top rival Stanbic Bank and ZMW 16m more than 03rd runner up Standard Chartered Bank). All in all, Barclays had an excellent Q3 performance, despite reporting a high impairment figure of (ZMW 55m) and ranking 04th in deposits at (ZMW 8.1b), Barclays still managed to climb to 02nd position reporting an asset size of (ZMW 11.6b) and impressively leading the industry’s interest income earnings thanks to a leapfrogging PAT of (ZMW 95.8m) in Q3 from (ZMW 29.9m) in Q2, Loans & advances of (ZMW 5.3b) only ZMW 2b less of Stanbic, and an impressively low cost to income ratio of 51%.

Strategy wise – Recently voted best Retail and Corporate bank in Zambia by International Business Magazine, there’s no denying that top on Mizinga’s agenda is to get Barclays to 01st position in 2020, notwithstanding the on-going transition to ABSA.


  1. Standard Chartered Bank came 03rd in the PAT marathon rallying behind Barclays and Stanbic Banks with PAT of (ZMW183m) YTD and deposits worth (ZMW8.4b). Stanchart ranked 04th across most earning metrics, reporting an asset size of (ZMW 10.4b), Loans & advances of (ZMW 3.1b) and PAT of (ZMW 60m) for Q3. Despite this, Stanchart led the industry’s Return on Equity (ROE) at 33% and continues to make deliberate cost management strides to maintain its cost line, thus keeping its cost to income ratio at 63%.

Strategy wise – Recently voted as Best Consumer Digital Bank in Zambia by Global Finance, Stanchart has embarked on the journey to take over the Zambian Retail space, following the launch of its digital bank in June this year.


  1. Zambia National Commercial Bank (Zanaco) 04th in the PAT marathon had a decent Q3 performance with YoY growth of over 200% from (ZMW 45.3m) in Q3 2018 to (ZMW 175m) in Q3 2019. From an interest income perspective, Zanaco was 02nd to Barclays alongside Stanbic and went on to rank 03rd across most earnings metrics, reporting an asset size of (ZMW 8.9b) after Stanbic and Barclays and solid Loans & advances of (ZMW 4.1b), 03rd to Stanbic and Barclays Bank’s with (ZMW 5.5b) and (ZMW 5.3b) respectively. However, Zanaco’s earnings were offset by its inflated cost line, reporting the industry’s highest cost to income ratio of 74%, mostly owing to human capital and operational related costs.

Strategy wise – Zanaco is still going through a re-structuring phase across most of its segments. With an improved ROE of 23%, Zanaco is one to look out for, with potential to perform even better if it’s restructuring phase results in a reduction of operating costs.

The following industry participants made top 9 out of the 18 commercial banks in Zambia in the Q3 PAT marathon namely; Bank of China with ZMW 154m at 05th position, Indo Zambia Bank with ZMW 127m at 06th position, exclusively corporate Citi Bank with ZMW 111m at 07th position, Ecobank with ZMW 71m at 08th position and First National Bank (FNB) with ZMW 49m at 09th position.

The 04th quarter (Q4) will be an interesting final stretch, with tough conversations taking place resulting in reassessed strategies. While Stanbic sits back to relax, we continue keep a close eye on the remaining players, anticipating increased competition as year-end approaches.

Have a FIZ day!

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