The Central Bank of Eswatini (CBE) recorded a challenging financial year ended March 31 with profit after tax falling by more than 80%.
This is as operating income, rising costs and significant foreign exchange losses weighed heavily on overall performance.
According to the statement of comprehensive income, profit for the year declined to E40.8 million from E205.7 million in the previous financial year, reflecting lower earnings compared to the previous year. The institution nevertheless remained profitable.
The decline was primarily driven by lower operating income. Total operating income decreased by 17.7%, from E807.5 million in 2025 to E664.8 million in March.
Net interest income, which is the core source of revenue for most banking institutions, declined by almost 10%, dropping from E367.7 million to E331.7 million.
This was mainly due to reduced interest income, which fell from E787.4 million to E744.7 million, although interest expenses also decreased slightly. The bank also experienced a significant reduction in non-interest income which declined by more than 24% from E439.9 million in 2025 to E333.1 million this year. The fall suggests weaker earnings from fees, commissions, trading activities, and other operating revenue streams.
While revenue declined, operating expenses increased. Total operating expenses increased by approximately 3.7%, rising from E601.9 million to E623.9 million. Higher expenditure on salaries and employee benefits, property occupation, depreciation, and other operational costs placed additional pressure on profitability.
The significant factor was foreign exchange revaluation losses. The bank reported other comprehensive losses of E307.5 million compared to E16.2 million in the previous year due to the revaluation losses.
These losses, although not reflected directly in annual profit, significantly affected shareholders’ equity and transformed the year’s financial outcome. As a result, the bank recorded a total comprehensive loss of E266.6 million, a sharp reversal from the E189.5 million comprehensive income reported in 2025.
The shift highlights the considerable impact that foreign exchange volatility had on the institution’s overall financial position. Despite the difficult year, the bank maintained a positive net profit, demonstrating resilience in its core operations.
Nevertheless, the substantial decline in earnings underscores the need for stronger cost management, enhanced revenue diversification, and improved foreign exchange risk management to restore profitability.
Looking ahead, management is expected to focus on increasing interest and non-interest income, controlling operating costs, and mitigating exposure to currency fluctuations. Success in these areas will be critical to strengthening financial performance and rebuilding investor confidence in the coming financial year.
Overall, the 2026 financial results reflect a year of significant challenges. Declining revenues, rising operating costs, and exceptionally high foreign exchange losses resulted in lower profitability compared with the previous financial year. The bank remained marginally profitable at the operating level.
