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BARCLAYS Bank Zimbabwe says its cost-cutting strategy contributed to the 37 percent increase in profit before tax for the half year ended June 30 2013.
Profit before tax for the period under review stood at US$1,1 million up from US$831 272 during the comparable period. The bank recorded a profit after tax of US$0,8 million for the period compared to US$0,5 million during the same period last year, translating to earnings per share of 0,04 cents.
In a statement, the bank’s managing director, Mr George Guvamatanga, said the bank had continued in its efforts to contain costs within planned levels.
“We remain focused on efforts to contain costs and a number of initiatives started in the first half are continuing into the second half,” he said.
He said year on year costs went up by 8,8 percent resulting in a positive variance compared to income growth of 10,1 percent.
Staff costs contributed 56 percent to the total cost base from 55 percent in the previous year.
Mr Guvamatanga said this performance was behind the bank’s internal income growth targets which had suffered from slower growth in transaction volumes and capped fees and charges.
He added that inflationary pressure in the second half was projected to be higher than the first half but the bank would keep costs within targeted levels.
Loans closed June 2013 at US$97,5 million up 64 percent from last year.
An impairment allowance of US$0,2 million for the period largely comprised general provisions and translated to an annualised loan loss ratio of 0,5 percent from 0,6 percent in the full year to December 2012.
Total assets went up 15 percent from the same period last year while deposits also went up 13 percent in the same period.
The bank’s lending approach followed the growth strategy closing the period at a loan to deposit ratio of 42 percent against the backdrop of market levels of non-performing loans that were said to be higher than international benchmarks.
Barclays closed the period at a liquidity ratio of 57 percent against a regulatory minimum of 30 percent.
The bank said the use of the ATM as a banking channel was expected to grow, enhanced by an increasing and refreshed ATM network which was being progressed.
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