By Alois Vinga

THE banking sector posted a profit of ZWL503, 13 billion on the back of sound regulatory supervision in the year 2022, Reserve Bank of Zimbabwe (RBZ) latest quarterly report has revealed.

The quarterly report for the period ending December 31 2022 shows that banking institutions realised significant profits during the period.

“All banking institutions were profitable during the period under review, with aggregate profit of $503, 13 billion, a notable increase from $59.29 billion reported in the corresponding period in 2021,” the report said.

The report observed that the growth in the banking sector income largely emanated from non-interest income (NII), which constituted 68 % of total income as at 31 December 2022, up from 54% reported in the corresponding period in 2021.

“The total NII mainly consists of revaluation gains from investment properties (62,88%), fees and commissions (29,15%) and translation gains on foreign currency denominated assets (7,98%),” the report said.

Total banking sector deposits amounted to $2, 29 trillion as at 31 December 2022 from $1, 91 trillion reported as at 30 September 2022 attributable to revaluation of foreign currency denominated deposits.

A total 18 out of 19 operating banking institutions reported prudential liquidity ratios which were above the minimum regulatory requirement of 30%.

The portfolio quality of the sector remained strong as measured by the nonperforming loans (NPLs) to total loans ratio of 1, 58% as at 31 December 2022, against the generally acceptable international threshold of 5%.

The low NPL ratio is partly reflective of sound credit risk management systems, intensified loan collections efforts and strong internal controls by banking institutions.

“In the outlook period, the macro economy is expected to remain stable in view of the projected lower inflation supplemented by sound monetary and fiscal policies.

“The banking sector will continue to support the economy through lending to the productive sectors and funding the requirements of the economy,” the report added.