The banking sector was profitable in the first quarter of the year with an aggregate net profit of US$20,47 million, the Reserve Bank of Zimbabwe has said.
In the same period last year, net profit for the banking sector was US$0,47 million.
"A total of 16 operating banking institutions recorded profits for the quarter ended March 31 2014," RBZ said.
As of March 31, there were 15 commercial banks, two merchant banks, three building societies and one savings bank.
One merchant bank, Capital Bank, recently surrendered the banking licence saying the major shareholder was unable to inject fresh capital for the institution to be capital-compliant.
RBZ said banks that recorded losses lacked critical mass to generate sufficient revenue and cover operating costs.
"The losses were mainly attributable to credit impairment, in a market characterised by increased loan delinquencies, balance sheet structures which are skewed towards non-interest earning assets, largely a reflection of non-liquid capital, high funding costs and operational expenses," it said.
RBZ said during the period, five banking institutions held cumulative deposits amounting to US$3,02 billion, representing 61,72% of the total banking sector. This means that the remaining 15 banks fought for the smaller share amid calls by experts that they should merge to remain viable.
"One banking institution continued to account for the largest share of total deposits, with deposits amounting to US$1,46 billion, representing 29,88% of total banking sector deposits," RBZ said.