Harare - Zimbabwean banks have reduced their lending as companies struggle to service their debts.
According to data gathered by Fin24 from published results by nine top Zimbabwean banks, lending for the half-year period to June 30 came down to US$2.397n from $2.420bn loaned out prior year comparative.
This is despite a 9.5% increase in deposits to $3.3bn for the nine banks analysed for this report.
Stanbic Bank, owned by Standard Bank [JSE:SBK], was one of the banks that reduced lending by 3.06%.
Of the nine banks Fin24 looked at, only three - including Barclays - had increased lending. Barclays is however coming from a very low loan to deposit ratio. Its current 46.6% loan deposit ratio is one of the lowest in the country.
From the data it appears the banks are taking a cautious approach to lending, as most companies struggle to service their loans.
The Zimbabwean banking sector is saddled with $700m or 18% of non-performing loans (NPLs), making lending very risky.
The $700m trapped in NPLs has also affected the liquidity situation in the country, with most reporting companies mentioning it as one of the key challenges facing business.
Tight liquidity conditions was the first economic challenge mentioned by the Reserve Bank of Zimbabwe (RBZ) in its monetary policy statement released a week ago.
Company closures and NPLs were also among the top six economic challenges mentioned by the RBZ.
The cutback on loans will result in stunted economic growth as companies will struggle for working capital and capital funding.
- Fin24
According to data gathered by Fin24 from published results by nine top Zimbabwean banks, lending for the half-year period to June 30 came down to US$2.397n from $2.420bn loaned out prior year comparative.
This is despite a 9.5% increase in deposits to $3.3bn for the nine banks analysed for this report.
Stanbic Bank, owned by Standard Bank [JSE:SBK], was one of the banks that reduced lending by 3.06%.
Of the nine banks Fin24 looked at, only three - including Barclays - had increased lending. Barclays is however coming from a very low loan to deposit ratio. Its current 46.6% loan deposit ratio is one of the lowest in the country.
From the data it appears the banks are taking a cautious approach to lending, as most companies struggle to service their loans.
The Zimbabwean banking sector is saddled with $700m or 18% of non-performing loans (NPLs), making lending very risky.
The $700m trapped in NPLs has also affected the liquidity situation in the country, with most reporting companies mentioning it as one of the key challenges facing business.
Tight liquidity conditions was the first economic challenge mentioned by the Reserve Bank of Zimbabwe (RBZ) in its monetary policy statement released a week ago.
Company closures and NPLs were also among the top six economic challenges mentioned by the RBZ.
The cutback on loans will result in stunted economic growth as companies will struggle for working capital and capital funding.
- Fin24