Non-Banking Financial Sector Assets at E94,2 Billion

By Ntokozo Nkambule

The Financial Services Regulatory Authority (FSRA) has revealed that non-banking financial sector assets currently stand at E94, 2 Billion.

The FSRA Quarterly Statistical Bulletin Q4, however, 2022 notes that the sector’s overall assets have declined on a year-on-year basis.

“When compared to this time in 2021, the non-banking financial sector assets declined by 0,2% from E94,4 billion to E94,2 billion.”

The FSRA Quarterly Statistical Bulletin is compiled to provide consolidated statistics and analysis relating to the quarterly performance of non-banking financial Institutions and the trends observed by the Authority in the sector’s performance.

The Report is based on the regulatory returns submitted to the FSRA by the licensed entities and on the supervisory and enforcement work conducted by the FSRA. The quality and depth of analysis depend on the accuracy and quality of the data submitted by the entities.

The regulator notes that long-term insurers, retirement funds, and collective investment schemes assets declined by 10,8%, 0,3%, and 9,8% respectively. 

However, on a quarter-on-quarter basis, growth of 1,9% in the Non-banking Financial Sector assets was observed with retirement funds, reinsurers, and retail outlets contributing to this growth.

Capital Markets

A slight decline of 0,1% was observed in the capital markets assets from E31,98 billion as of September 2022 to E32,0 billion in the current quarter. However, on a year-on-year basis, a 1,5% decline was observed. 

Although a year-on-year decline was observed, Assets Under Advisory (AUA) increased by 1,9%,  while a decline of 10.8% was observed in Assets Under Management. 

The declining trend in Assets Under Management (AUM) was observed throughout the year and this was due to several factors including the closure of one collective scheme and the withdrawal of funds by institutional investors to fund other activities including infrastructural projects

Credit & Savings Institutions

Total assets under the credit and savings institutions increased from E15,1 billion as of December 2021 to E16,2 billion as of December 2022. 

A growth in the assets of all the sub-sectors was observed mainly driven by the increase in the credit portfolios of the entities in this sector. 

The report notes that the highest growth was observed in credit providers, SACCOS, and retail outlets whose assets grew by 7,8%, 9,3%, and 9,6% respectively.

The Insurance Sector

Concerning the insurance sector, a decline of 10,4% in assets was observed when compared to the previous quarter. FSRA attributes the drop in the sector’s assets to the decline in long-term and short-term insurers’ assets while reinsurers showed a growth of 3,9%. 

On a year-on-year basis, a 3,3% growth in the sector’s assets was observed with a significant growth of 44,1% observed in the reinsurers’ assets while long-term insurers registered a year-on-year decline.

Retirement Funds

Retirement funds assets declined by 0,3% from E42,6 billion as of December 2021 to E42,5 billion. However, on a quarter-on-quarter basis retirement fund assets showed a 5,1% growth showing a steady recovery from the financial markets’ turbulence.

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