A Reliable, Profitable, and Shareholder-Focused Zambian Bank
Zambia National Commercial Bank Plc (Zanaco) is one of the country’s largest and most trusted banks, and it’s also a listed company on the Lusaka Securities Exchange (LuSE). With over two million customers and a presence across the country, Zanaco plays a central role in Zambia’s financial system.
In 2024, despite economic challenges, the bank showed its strength once again, growing its lending, expanding its deposit base, increasing profits, and raising dividends for shareholders. Whether you’re an investor looking for stable returns, or a Zambian citizen interested in your bank’s performance, this review explains why Zanaco remains a valuable part of the local economy and an attractive investment option.
2024 Financial Performance
Let’s take a look at some important figures and what they mean:
Indicator 2024 2023 Change
Net Profit After Tax K1.80 billion K1.76 billion +3.0%
Net Interest Income K3.80 billion K3.47 billion +9.4%
Total Operating Income K5.58 billion K5.28 billion +5.7%
Total Assets K48.08 billion K44.80 billion +7.3%
Customer Deposits K36.02 billion K33.86 billion +6.4%
Customer Loans K19.98 billion K16.18 billion +23.5%
Shareholder Equity K5.60 billion K4.42 billion +26.7%
Dividend Paid K619 million K421.6 million +46.8%
Earnings Per Share (EPS) K1.24 K1.20 +3.3%
Breaking It Down:
Profits Are Up Steadily
Zanaco earned K1.79 billion in profit in 2024, a 3.2% increase from 2023. While this is not a dramatic jump, it shows that the bank continues to make money even in a challenging economy. It also shows consistency, something every investor should appreciate.
Profit is what’s left after covering all costs. A growing profit usually means a stronger business and potentially better rewards for shareholders.
Lending
Customer loans jumped from K16.18 billion to K19.98 billion, a 23.5% increase. This means the bank lent more money to people and businesses in 2024.
More lending usually leads to more income for the bank. It also means Zanaco is helping the economy by giving people and companies the credit they need to grow.
Customer Deposits
Deposits increased by 6.4%, reaching K36.02 billion. People and companies are continuing to trust Zanaco with their money.
Banks use customer deposits to fund loans and operations. Rising deposits show confidence from the public and give the bank the ability to grow further.
Stronger Asset Base and Capital
Zanaco’s total assets increased by 7.3% to K48.08 billion, and shareholder rose by 26.7% to K5.60 billion.
This means the bank is building strength. A stronger balance sheet gives it more room to lend, grow, and survive economic shocks.
Returns and Dividends Performance
· Earnings Per Share (EPS) rose slightly from K1.20 to K1.24.
· Dividends increased by 47% from K421 million to K619 million.
· Return on Equity (ROE) was around 33%, slightly lower than 2023’s 41%, but still very healthy.
· EPS shows how much profit the bank made per share. Higher EPS means your share in the bank became more valuable.
· ROE tells you how efficiently Zanaco is using shareholder money to generate profits.
· The dividend increase shows that Zanaco is rewarding shareholders with higher cash payouts.
In short: If you own Zanaco shares, the value of your investment is growing, and you’re earning more cash from dividends.
Other Information to Note
1. Loan Impairments Jumped: Loan loss provisions (money set aside to cover bad loans) rose from K21.8 million to K193 million. This suggests that more customers are struggling to repay.
The bank is being cautious, but it also reflects economic pressures on borrowers. If not managed well, this could affect profits in the future.
2. Cost-to-Income Ratio Rose: This ratio increased from 48.8% to 53.9%, meaning it’s becoming more expensive for Zanaco to operate.
Operational efficiency is slightly down. The bank is spending more to earn each kwacha of income, which could impact profits if not addressed.
Future Plans
Zanaco is also investing in digital transformation, SME banking, and risk management. It continues to serve as a key financial partner to the Zambian economy by providing loans, managing payments, and supporting investment.
The bank’s broad footprint, trusted brand, and strong capital base position it to continue growing responsibly.
Summary of Key Ratios
Ratio 2024 What it Means
Return on Equity
(ROE) 33% Profitability is strong. Efficient use of shareholders’ money.
Cost-to-Income Ratio 53.9% Costs are rising faster than income
EPS (Earnings per
Share) K1.24 Each share earned K1.24 therefore value is increasing.
Dividend per Share Approx. K0.43 Cash returned to shareholders is growing.
Loan Impairments K193 million Higher than last year credit quality must be watched.
Conclusion
Zanaco has proven once again that it is a resilient, profitable, and investor-friendly institution. It offers a mix of:
· Stable profits
· Growing dividends
· Strong lending performance
· Confidence from customers and investors alike
While there are challenges, particularly rising credit impairments and operational costs, Zanaco’s fundamentals remain strong. It continues to reward shareholders, grow its business, and contribute meaningfully to Zambia’s economy.
For investors seeking long-term growth, income through dividends, and exposure to Zambia’s financial sector, Zanaco remains one of the most reliable listed choices on the Lusaka Stock Exchange.
