Online Reporter
Business Writer
InnBucks MicroBank Limited has unveiled its financial results for the first half of the fiscal year ending June 30, 2025, showcasing a mix of robust growth and strategic challenges.
The bank reported a remarkable surge in key financial metrics, particularly in assets, deposits, and loans, reflecting its expanding market presence and customer base. Total assets increased by 180 percent to ZiG1.67 billion from ZiG597.32 million in June 2024, underscoring its enhanced capability in attracting deposits and expanding its lending activities.
Customer deposits experienced an even more impressive growth, soaring by 230 percent to ZiG859 million, with substantial contributions from business banking clients.
Similarly, loans and advances rose by 125 percent to ZiG767.78 million, driven by strong uptake in business banking and payroll-based lending segments.
“This significant growth in assets and deposits underscores our strategic focus on expanding our footprint and enhancing financial inclusion,” remarked the company, highlighting the bank’s commitment to bolstering its market position.
The bank’s net interest income also surged, increasing by 526 percent to ZiG86.1 million, driven by robust returns from its loan portfolio and investments in Treasury assets.
However, despite these positive strides, InnBucks faced a 12 percent decline in profit before tax, falling to ZiG42.5 million from ZiG48.2 million in the same period last year.
This decrease was primarily attributed to a drop in fee income following the adoption of the KaOne US$1 subscription model, aimed at promoting customer loyalty through unlimited transactions for a flat fee.
“We are encouraged by the strong growth in deposits and assets, which underpin our long-term growth strategy,” noted the bank, expressing optimism about future prospects.
Equities analyst Susan Ngorima said InnBucks MicroBank’s impressive surge in assets and deposits underscores its aggressive market expansion and robust customer acquisition strategy.
“The substantial growth in assets by 180 percent and deposits by 230 percent reflects strong confidence from both retail and business banking clients. This bodes well for future revenue streams and market competitiveness, despite the profitability dip due to operational costs and fee income adjustments.
The bank’s focus on bolstering liquidity and core capital positions it favorably amidst economic volatility, highlighting its resilience,” she added.
Nevertheless, rising operational costs posed a formidable challenge, increasing by 151 percent year-over-year. Major cost drivers included a nearly 100 percent increase in staff expenses and substantial rises in IT, infrastructure, and administrative costs.
In addition to internal challenges, external economic factors also influenced InnBucks’ performance. The introduction of the ZiG currency and its subsequent devaluation against the US dollar, coupled with stringent monetary policies, contributed to volatility in the financial landscape, impacting fee-based revenue streams.
Despite these headwinds, InnBucks maintained a robust liquidity ratio of 58 percent, well above regulatory requirements, and bolstered its core capital to ZiG248.04 million, ensuring a solid foundation for future growth and resilience against economic fluctuations.
Itai Bamara, a research analyst, said the first-half financial results demonstrate a compelling growth narrative driven by a substantial increase in assets and deposits.
“The bank’s strategic emphasis on expanding its loan portfolio, particularly in business banking and payroll-based lending, has effectively broadened its market reach,” he said.
“However, the decline in pre-tax profit signals operational challenges, exacerbated by rising costs and economic headwinds. Going forward, managing expenses while sustaining growth momentum will be critical for InnBucks to capitalise on its strengthened market position and navigate regulatory complexities effectively.”
Looking ahead, InnBucks said it remains focused on digital banking innovation and expanding its service ecosystem to enhance transaction efficiency and customer satisfaction. However, balancing growth with profitability amidst evolving regulatory dynamics and cost pressures remains paramount.
InnBucks’ performance in the first half of fiscal year 2024 highlights its potential as a leading player in Zimbabwe’s digital financial sector. However, the bank must navigate challenges diligently to sustain its growth trajectory and achieve sustainable profitability in the long run.
Bongani Ndlovu