Impressive Stanbic financial results

Business Reporter
FINANCIAL services institution, Stanbic Bank Zimbabwe, has demonstrated business resilience after posting an inflation adjusted profit of ZW$11,2 billion for the six months to 30 June 2022 up from ZW$3,5 billion in the comparative period last year.

The Standard Bank Group subsidiary shrugged off the challenging economic environment to sustain top notch business muscle through its impressive set of results. Chairman, Mr Gregory Sebborn, said the strong set of results were driven by a proactive response to growing working capital requirements from customers through provision of lending facilities in both local and foreign currency at a time when cost of doing business had been trending upwards.

In a statement accompanying the results, Mr Sebborn said revaluation gains recorded on the bank’s foreign currency positions combined with fair value adjustments on investment properties as the ZW$ currency continued to weaken against the US$ also contributed significantly to the performance.

“In addition, the level of business activity, which was experienced during the period had improved as business operations normalised after the two-year Covid-19 era had eased,” he said.

Stanbic Bank ended the period under review with a qualifying core capital of ZW$32 billion, surpassing the local currency equivalence of the required US$30 million regulatory minimum.

Chief executive, Mr Solomon Nyanhongo, said, on a historical cost basis, a profit of ZW$22,2 billion was recorded in the first half of the year compared to ZW$2 billion in the prior period.

He said the bank’s net interest income grew by 66 percent from ZW$7,5 billion in the comparative period to ZW$12,3 billion.

“This growth was largely spurred by strong growth in interest earning assets as new lending assets were written compounded by the upward review of interest rates during the period.

“Fee and commission income for the period had increased by 21 percent from ZW$7,8 billion in 2021 to ZW$9,5 billion largely underpinned by the improved volumes of transactions, which were being processed on our various service channels,” said Nyanhongo.

The bank’s trading revenue improved, supported largely by better trading activity in the market combined with revaluation gains recorded on foreign currency positions. Stanbic’s credit impairments ended the period at ZW$1,1 billion growing from a net release of ZW$305 million in the prior period, on the back of new lending assets which had been written during the period.

In the prior period, significant recoveries were recorded on the bank’s financial assets. However, total operating expenses increased by 50 percent from ZW$9,4 billion in the comparative period to ZW$14,2 billion largely because of the impact of the continued weakening of ZW$ currency against the US$ on the bank’s foreign denominated expenses, which have increased substantially in local currency terms.