THE stabilisation of the economy following the adoption of the multi-currency system is paying dividends as most banks returned to profitability last year.
According to a report prepared by BancABC, the banks'profitability improved 232 percent to US$58,7 million with the bulk of their income coming from non-interest income.
Ideally, the main income stream for banks should be net interest, which should cover the banks' operational costs.
Only two banks made losses - Barclays and Premier - compared with seven in the 2009 financial year.
CBZ was the most profitable at US$20,9 million, followed by Standard Chartered, with US$8,3 million.
Stanbic Bank, a member of the Standard group, which was voted the Bank of the Year last year, posted US$7,9 million in profits while Kingdom realised a profit of US$4,1 million.
FBC Bank completed the top five list of profitable banks after posting US$3,7 million in profits.
Other positive results were realised in POSB at US$3,43 million and BancABC at US$3,39 million.
Out of the 17 commercial banks under review, the analysis indicated that the aggregate bank assets also improved from US$1,7 million in December 2009 to US$2,9 billion in December last year.
As a percentage of GDP, total bank assets increased from 31 percent in 2009 to 44 percent last year.
Of the total banking assets, CBZ again accounted for the largest share of about 22,2 percent, followed by Stanbic at 11,6 percent, Standard Chartered at 9,6 percent, BancABC 8,6 percent and Barclays 7,8 percent.
Cumulatively, the top five banks in terms of assets accounted for 59,8 percent of total banking sector assets.
MBCA, ZB, FBC, Kingdom commanded slightly over 5 percent of total assets while CABS accounted for 6,2 percent.
On average, deposits accounted for about 73 percent of bank assets in 2010 compared with 63 percent in 2009.
BancABC said this reflected growing confidence in the banking sector, with deposits growing to about US$2,3 billion by close of last year. Advances from banks to the private sector have also been on the increase.
But deposits remained skewed in favour of the top five players, with CBZ still leading the pack, accounting for 24 percent or US$578 million of total deposits.
Stanbic accounted for US$302 million, Stanchart US$222 million, BancABC US$216 and Barclays US$181 million.
Other middle-tier banks with a sizeable share of deposits included FBC with 5,7 percent, MBCA 5,7 percent, CABS 5,2 percent, Kingdom 4,8 percent and ZB Bank 4,3 percent.
Growth in credit to the private sector during the period under review increased to US$1,6 billion in December last year, representing an average monthly increase of US$87 million.
The banks are also holding a significant amount of cash and cash equivalent assets, which represent liquid assets. Ideally, the bulk of cash on hand should be invested in the money market instruments such as Treasury bills and bonds.