Bank posts $607,2m profit

Business Reporter
STANBIC Bank Zimbabwe has posted an impressive $607,2 million inflation adjusted profit after tax for the half year ending June 2020, as it rebounded from a $624 million loss posted for the same period last year.

The Bank, a subsidiary of Standard Bank Group of South Africa, attributed the performance to improved non-funded income, which includes trading revenue, fee and commission income and fair value adjustments on investment properties.

In a statement accompanying the results Stanbic Bank board chairman, Mr Gregory Sebborn, said the bank ended the six-months to 30 June, 2020 with a qualifying core capital of $2,1 billion surpassing the local currency equivalence of the required US$30 million regulatory minimum core capital, which has been set for the end of 2020.

Mr Sebborn said while the operating environment remained extremely challenging, the economy recorded notable development in 2020 such as increases in power generation to levels estimated at 1 050MW by the end of June 2020 from 660MW at the beginning of the year attributable to increase in water levels in Lake Kariba.

“Cereal production also significantly increased mainly on the back of a rise in small grains output. Lastly, the trade deficit during the first five months of 2020 narrowed to US$340 million,” said Mr Sebborn.

Despite the above milestones the economy continues to face challenges, which have been compounded by the outbreak of Covid-19, low business confidence, rising inflationary pressures, foreign currency shortages, erratic rainfall patterns, low disposable incomes and unstable energy supply among others.

The bank’s chief executive, Mr Joshua Tapambgwa, said net interest income for the period declined by 28 percent from $540 million to $389 million although the lending book had grown by 11 percent from $2,5 billion as at the end of December to $2,7 billion.

The bank’s lending rates remained stagnant on account of regulatory constraints, at a time when average monthly rates were around 18 percent.

“The bank registered a 23 percent growth in its fee and commission income, growing from $395 in the prior period to $486 million largely buttressed by the impact of the continued depreciation of our local currency against the US-dollar on the foreign dominated commission income, which, in turn, had increased substantially in local currency terms,” said Mr Tapambgwa.

He said fair value adjustments, which were recorded during the period on investment properties underpinned the uplift in the bank’s inflation adjusted total income, which grew by 108 percent from $1,4 billion as at the end of June 2019 to $2,9 billion.

Stanbic Bank has pledged to continue spending more on corporate social investments and working closely with Government in mitigating the impact of Covid-19 in communities.

Working with other well-wishers, the bank has provided equipment worth US$200 000 comprising ventilators, personal protective equipment, sanitisers and two boreholes.