Banking Sector Loans and Advances

62. Banking institutions bolstered their capital positions through organic growth including recapitalisation of revaluations gains on investment properties as well as capital injection by shareholders.

63. As indicated above, AFC Commercial Bank, Nedbank and NBS were granted extensions ranging from 3 to 12 months to allow consummation of capital raising initiatives which are currently underway. In addition, merger proposals will also address the minimum capital requirements for some building societies. The Bank is confident that the remaining institutions will meet the minimum capital requirements by 31 December 2022.

64. The above declared capital positions as at 31 December 2021 are being subjected to external audit reviews as part of the annual financial audits of banking institutions. The Bank will also conduct a capital verification exercise during the year to ascertain the declared capital positions.

Banking Sector Loans and Advances

65. Total banking sector loans and advances increased by 61% from ZW$142.79 billion as at 30 June 2021 to ZW$229.94 billion as at 31 December 2021, largely attributed to the translation of foreign currency denominated loans.

As at 31 December 2021, foreign currency denominated loans constituted 36.87% of total banking sector loans, an increase from 30.16% reported as at 30 June 2021.

66. During the period under review, financial intermediation improved from 45.84% recorded in June 2021 to 48.27% as at 31 December 2021. The

banking sector continued to support the productive sectors of the economy as evidenced by loans to the productive sector constituting 76.29% of total loans as at 31 December 2021, as shown in Figure 11.