Banking Sector Records An After Tax Profit of E581 Million

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By Ntokozo Nkambule

The Central Bank of Eswatini’s (CBE) 2023 Governor’s Annual Monetary Policy Statement has revealed that the total industry after-tax profit for banks in the country increased by 22% for the year ending December 2022.

The CBE, Governor Dr. Phil Mnisi in this year’s Statement themed ‘Ensuring Price and Financial Stability under a Volatile Economic Environment’ noted that the total industry after-tax profit for banks increased to E581 million in 2022 from E486 million the previous year.

The Governor observed that the industry’s performance was commendable considering the difficulties banks faced during the COVID-19 pandemic era.

“The industry improved in the period under review, recording an after-tax ROE of 6.0% as of December 2022, down from 5.7% in the same period in 2021. This reflects an improvement in the industry’s profitability considering the difficulties banks faced during the COVID-19 pandemic era.”

Furthermore, Mnisi noted that the banking industry’s total assets grew by 7.2% for the period under review.

“The banking industry’s total assets grew from E25.7 billion in December 2021 to E27.7 billion in December 2022, while deposits slightly increased from E20.7 billion to E20.9 billion in the same period reflecting an increase of E1.1%. Deposits which are considered the cheapest funding source continued to entirely fund loans with the loans to deposit ratio sitting at 69.9% as of December 2022.”

Moreover, the Governor’s Annual Monetary Policy Statement notes that the banking sector liquidity remained resilient and compliant even when the minimum statutory liquidity ratio was increased to 22.0% for commercial banks and 20.5% for Development and Savings banks. The liquidity ratio for the industry was recorded at 34.9% for the year ended December 2022.

Mnisi added that the banking industry’s asset quality was also notably stronger as it registered a Non-Performing Loans ratio of 6.61% down from 6.8% in December 2021.

He said such results indicate some of the positive results that the Central Bank made through its regulatory interventions during the COVID-19 pandemic era.

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