REPAY YOUR LOANS - ESWATINIBANK

MANZINI – EswatiniBank Managing Director (MD) Nozizwe Mulela has pleaded with its customers to repay their loans, as the bank is grappling with non-performing loans (NPLs).
Mulela was speaking during the relaunch of the Horticulture Revolving Fund last week at The George Hotel.As of March 31, 2024, the bank reported a 11.3 per cent non-performing loan ratio. According to the bank’s audited financial statement, the bank experienced a significant increase in credit costs and operating costs, hence the closing net loss position.“This was largely a result of significant impairments raised with respect to a few facilities, which have remained in non-performing status for an extended period of time.‘‘The bank continues to pursue the respective customers while efforts to collect from collateral are also being made,” reads the statement. The bank’s gross income generated during the year ended March 31, amounted to E445 262 million, which reflected an increase of E56.346 million from the E388.916 million in the previous year.”“The bank also achieved good growth in its total assets and increased the loan book in line with improvement in the economy.Speaking last Thursday, the MD said she was in and out of ‘big offices’ explaining what they are doing to address the issue of the high non-performing loans realised by the bank.

Operations

“Please help us bring back the money so we can continue working and serve emaSwati,” said the MD. She stated that this bank belongs to emaSwati, and it was upon them to see it grow by cooperating with it in its day-to-day operations.She said they are there to assist emaSwati grow their businesses as well, through availing the different credit facilities designed to help businesses, especially small and medium enterprises (SMEs). She said it was important to understand that the money that the bank lends out as loans belongs to the depositors who had placed their money for late purposes. She said, therefore, the depositors should always find their money with interest. A look at other banks’ non-performing loans ratio, the Nedbank Eswatini’s interim results for the six months ended June 2024, indicated that the bank reported an increase of 12 per cent in non-performing loans, reaching E434 million from the E386.9 million recorded in 2023.

It was explained that the high levels of impairment were attributable to the high interest rate environment that has increased the financial stress on clients. It is expected that the bank’s clients will collectively breathe a sigh of relief following the Central Bank of Eswatini’s (CBE) decision to slash interest rates by 25 basis points to 7.25 per cent during its last monetary policy consultative meeting, last week, as consumer prices cooled down and projections for inflation remained on the down side of the scale.This cut follows months in which the benchmark rate had held steady at 7.50 per cent despite a discernible decline in headline inflation.

Extension

Meanwhile, FNB Eswatini’s credit loss ratios remain well below industry averages at 0.2 per cent (2023: 0.3 per cent), despite strong credit extension during that period. The bank said this was a result of a strong collections programme and very good recovery in credit impairments recorded in prior years, and projections are that these loss ratios should normalise in future years. “The low credit loss experience and the high capital base, leave the bank in a very strong position to pursue lending opportunities,” said the bank.
Standard Bank Eswatini reported that during the year ended December 31, 2023, their credit impairment charges increased by 9 per cent.

Post your comment

Your name:

Your e-mail address:

Add your comments:

Please enter the code you see in the image:

Image:

Code: