adminEnacy Mapakame Business Reporter
PAN-AFRICAN bank, Ecobank’s total income in Zimbabwe for the half-year to June 30, 2017 jumped 104 percent to $25 million on increased trade finance activities, reduced cost of funds and increased customer base. After tax profit rose 235 percent to $11, 4 million from $3, 4 million in the comparable prior year on an increase in income.
Net interest income grew by 70 percent year-on-year on the back of increased interest earning assets, despite reductions in the overall lending rates in line with central bank policy.
Ecobank managing director Mr Moses Kurenjekwa, said the growth in net interest earned was due to the increase in non-interest bearing deposits and reduction of fixed term deposits.
“These efforts have eased the bank’s cost of funds, which alleviated the impact of falling lending margins due to regulatory and market forces.
“Furthermore, the growth in net interest income is in line with the higher quality of the earning assets portfolio which has improved through recoveries of non-performing loans, resulting in a drop in the non-performing loans (NPL) ratio from 3 percent in June 2016, to 1 percent in the last quarter of 2016 which has been sustained throughout the half year period,” he said.
Kurenjekwa indicated that the bank had recovered $4 million of previously written off loans on the back aggressive debt recovery measures.
Non-interest income registered a year-on-year growth of 43 percent driven by a growing structured trade finance portfolio, higher customer transaction volumes on electronic channels in response to cash shortages and increased income from foreign currency switches.
In light of this, revenue growth out-paced operating expenses resulting in an improvement of cost to income ratio to 41 percent from 51 percent in the same period last year.
Loans and advances rose 24 percent to $164, 2 million while total deposits decreased by 4, 5 percent to $314, 6 million.
Total assets of $397 million represent a neutral growth of under 1 per cent on the December 2016 position, but a positive 50 per cent year-on-year growth from June 2016.
“The positive results generally provide opportunity for further prudent lending within the second half of the year,” said Kurenjekwa.
The bank’s total Treasury Bill stock rose 48 percent to $90 million.
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