Assets decline from E95.3 billion to E93.1 billion. The decline was due to the overall asset decline in retirement funds assets which are over 1/3rd of the non-banking financial sector assets. The decline in retirement funds assets also led to the decline in assets held by domestic asset managers.
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By Ntokozo Nkambule
“A 2% decline in assets was observed in the Non-Banking Financial Institutions (NBFI), sector assets as they declined from E95.3 billion as of 31 December 2021 to E93.1 billion during the quarter under review”, reads the Financial Services Regulatory Authority (FSRA)’s Quarterly Statistical Bulletin Q1 2022.
The bulletin states that the decline was due to the overall asset decline in retirement funds which are over 1/3rd of the non-banking financial sector assets. The decline in retirement funds assets also led to the decline in assets held by domestic asset managers. FSRA further notes that the decline in retirement fund assets also led to the decline in assets held by domestic asset managers.
Additionally, the quarterly bulletin observes that sluggish economic conditions led to a decline in the capital markets sector. “As of 31 March 2022, the total value of assets under advisory and management in the capital markets sector was valued at E31.9 billion; this is a 1% decline when compared with the E32.4 billion recorded at the end of Q4 2021” notes the report.
Furthermore, under Credit and Savings institutions, a 0.6% decline in assets was observed when compared to Q4 2021. This decline was mainly due to the asset declines across the various sub-sectors except for SACCO assets which increased by 0.03%.
On a positive note, the statistical bulletin observes that a year-on-year increase of 7.3% was observed in the value of retirement fund assets, however, a slight quarter-on-quarter decline of 1.7% was observed. In comparison with the first quarter of 2021, total income decreased by 65 % from E2.6 billion to E937 million in the first quarter of 2022.
In terms of the Insurance industry, a 3% year-on-year increase in Gross Written Premiums (GWP) for Long Term Insurance (LTI) was observed, and a similar increase was also observed in sub-sectors assets. A 25% year-on-year increase in the Short Term Insurance (STI) gross written premiums was observed. An improvement in GWP was observed across all classes of business except for motor and workmen’s compensation which declined.