By Phiwa Sikhondze
Despite economic challenges, Eswatini’s banking sector continues to demonstrate remarkable resilience, with total assets reaching E28.9 billion in 2024.
This represents a 9.9% year-on-year increase, signaling the financial system’s underlying stability even amid a decline in profitability.
The latest data, presented by Dr. Phil Mnisi, Governor of the Central Bank of Eswatini (CBE), during the 2024 Financial Stability Review, highlights that the growth of these assets is primarily driven by an uptick in customer deposits and credit expansion.
However, the financial system faces mounting pressure as return on equity (ROE) fell from 17.3% in 2023 to 13.8% in 2024, a clear reflection of ongoing economic headwinds.
Dr. Mnisi noted that the decline stems from tightening financial margins and escalating operating cost
“Despite these positive indicators, profitability faced significant pressures. Return on Assets decreased from 2.6% to 2.0%, and Return on Equity fell from 17.3% to 13.8%. The increase in operational expenses, particularly related to rising interest costs and staff expenses, has impacted banks’ ability to generate profits. Additionally, liquidity slightly weakened, with the liquidity ratio declining from 33.8% to 30.9%. This underlines the need for careful liquidity management in the period ahead,” the governor noted.
Despite these concerns, Eswatini’s banking system remains well-capitalized with a capital adequacy ratio of 17.4%, well above the 8% regulatory threshold.