Stanbic Bank Zambia, which claims to be the country's largest letter of credit (L/C) and guarantee provider, has recorded a profit after tax of 450 million Zambian Kwacha (K450 million - US$30.8 million).

This represents year-on-year growth of 95.7 per cent, which the bank says is the first time any financial institution in Zambia has posted earnings this strong.

Stanbic's CEO, Leina Gabaraane, says L/Cs and trade finance have helped the bank's substantial growth.

Record earnings

The bank's latest milestone sets a new earnings record in the local financial sector, surpassing the previous record set in 2016 by K89 million according to Stanbic.

The bank's growth is impressive since it has been achieved amidst an economic downturn in Zambia that has variously featured rising inflation, fiscal imbalances, a volatile currency and a persistent energy crisis.

Gabaraane says the bank chose to tackle Zambia's tough economy "head on" by adapting its products and services rather than scaling down its activity, including in its trade finance provision.

Largest L/C provider

The bank has "retained its position as the largest provider of trade services like guarantees and L/Cs in Zambia's banking sector in 2019," she says.

"This has culminated in a total of K5.38 billion worth of credit being injected into the economy so far," Gabaraane concludes.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.