Banks’ capacity to continue to drive down cost to income ratio (CIR) from reducing costs now seems to be improving, evidenced by the decline in CIR to 72.53 percent in the period under review relative to 88.61 percent in 2015.
The industry’s loan-to-deposit ratio as at December 31, 2016 was 57.75 percent, showing less lending aggression than the 76.46 percent in the prior year.
All banks have maintained their capital adequacy ratios above the RBZ minimum requirement of 12 percent. The average capital adequacy ratio for reporting banks had significantly improved to 30 percent in the period from 21.39 percent previously.
Not all banks are likely to achieve the $100 million capital requirement by 2020 as stipulated by the central bank, since a number of them are still far below the target, despite all being above the current requirement.
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