NBFI ASSETS SOAR BY 3.5%, REACH E110b

MBABANE - NBFI assets increased by 3.58 per cent, bringing the total assets to E110 billion from E106 billion in the previous quarter.

However, according to the non-banking financial institutions (NBFI) quarterly bulletin for the third quarter (September – December 2024), on a year-on-year basis, growth of 9.82 per cent was realised.

Quarterly growth was the result of growth in the capital markets due to asset appreciation and new funds which resulted in an overall increase of 8.31 per cent, with the highest growth emanating from assets under advisory.

Short-term insurers and reinsurers also contributed to the growth with asset growth of 9.02 and 8.71 per cent respectively, while long-term insurers realised a 6.41 per cent growth. DFIs however experienced a 5.82 per cent quarterly decline. The insurance sector was however the significant contributor to the year-on-year growth with short-term insurers experiencing growth of 18.62 per cent, long-term insurers 13.97 per cent and reinsurers 14.07 per cent.

Retirement funds growth contribution to the sector stood at 11.88 per cent while investment advisors realised annual growth of 10.81 per cent, but Collective Investment Schemes (CISs) show a slight annual decline of 0.11 per cent.

SACCOs also showed good annual performance realising growth of 11.65 per cent. The other sectors experienced growth ranging from 2.27 to 4.48 per cent. On a quarterly basis, capital markets assets increased by 8.31 per cent to E37.73 billion, driven by interest payments, bond coupons and dividends.

Investments

Domestic investments rose to 40.18 per cent, while the Common Monetary Area (CMA) and offshore markets portfolio declined. CIS assets also showed an increase of 5.40 per cent to E8.80 billion.

Capital markets continue to rely on the retirement funds sector as 74.81 per cent of the assets held by the capital markets related to retirement funds assets.

Long-term insurance (LTI) gross written premiums (GWP) surged by 51.56 per cent to E776.92 million, driven by retirement fund direct premiums. Net earned premiums increased by 65.25 per cent, reflecting strong underwriting performance.

Short-term insurance (STI) GWP grew by 41.96 per cent to E939.84 million, with motor and engineering insurance being key contributors. Net claims incurred rose by 58.98 per cent, primarily due to increased motorrelated claims.

Retirement funds’ total assets increased by 0.76 per cent to E50.49 billion, with local assets declining slightly by 0.18 per cent and foreign assets growing by 1.59 per cent.

Contributions rose by 12.88 per cent, driven by employer contributions. The sector’s investment allocation favoured equities at 63.12 per cent and long-term debt instruments at 21.09 per cent, reflecting a focus on long-term growth and stability.

Savings and Credit Co-operatives saw a 1.53 per cent increase in total assets to E2.98 billion, driven by financial investments and net loan portfolio growth. However, credit providers experienced a 12.45 per cent decline in asset value due to reduced loans and advances. Building Societies’ assets declined by 0.92 per cent to E3.68 billion, but loans and advances increased by 0.51 per cent.

Non-performing loans (NPLs) in the sector decreased, indicating improved credit quality.

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