THE country's banking sector's total profits surged by $2 billion in four months amid overall sound performance of the sector on the back of prudential supervision by the regulator, the Reserve Bank of Zimbabwe (RBZ) has revealed.
The central bank's latest quarterly report on the banking sector, covering the period up to September 30, 2021, confirmed a significant surge in profits.
"Aggregate banking sector net profit increased from $23,37 billion for the period ended 30 September 2020 to $25,39 billion for the period ended 30 September 2021, on the back of growth in non-interest income, mainly attributable to fees from the increased use of digital banking platforms," the report said.
Most local banks have been hailed for embracing technology and moving away from physical banking in favor of digital and internet-based practices, a development which, has seen most financial institutions reducing the number of physical branch networks.
The RBZ report shows that through sound regulatory supervision, the banking sector operated way above expected capitalisation thresholds with aggregate core capital amounting to $63,39 billion as of 30 September 2021, up from $53,66 billion as of 30 June 2021 mainly attributed to growth in retained earnings.
Total banking sector assets increased by 18,19%, from $569,9 billion as of 30 September 2021 mainly attributable to translation of foreign currency-denominated assets.
During the period under review, the total banking sector loans increased by 23% from $142,7 billion as of 30 June 2021, to $175.6 billion as of September 30, 2021.
"The increasing economic activity on the back of vaccine rollout, slow-down inflation, expected good rains in the 2021/2022 farming season, and stability of the local currency is expected to provide a stable environment for the banking sector.
"The banking sector will continue to play an important role in supporting the funding requirements of the economy as the recovery gains traction," the RBZ report added.