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Business Reporter
Stanbic Bank demonstrated resilience in a challenging operating environment after the bank’s inflation adjusted profit jumped 228,5 percent to $11,2 billion in the six months to 30 June, 2022, compared to the same period last year.
The bank shrugged off the difficult economic environment, characterised by inflationary pressures and volatile exchange rates, to post a solid set of results and entrench its position as one of the leading financial institutions in the country.
Chairman, Gregory Sebborn, said the strong set of results was driven by the bank’s proactive response to the growing working capital requirements of customers through the provision of loans in both local and foreign currency.
In a statement accompanying the financial results, Mr Sebborn said revaluation gains recorded on the bank’s foreign currency positions, combined with fair value adjustments on investment properties, as the Zimbabwe dollar weakened against the US dollar, also contributed significantly to the strong 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,” said Mr Sebborn.
The bank ended the period under review with a qualifying core capital of $32 billion, surpassing the local currency equivalent of the required US$30 million regulatory minimum.
Stanbic Bank chief executive, Solomon Nyanhongo, said on a historical cost basis, a profit of $22,2 billion was recorded in the first-half of the year compared to $2 billion in the prior period.
Mr Nyanhongo said the bank’s net interest income grew by 66 percent from $7,5 billion in the comparative period to $12,3 billion.
“This growth was largely spurred by the strong growth in interest earning assets as new lending assets were written compounded by the upward review of interest rates during the period. Fees and commission income for the period had increased by 21percent from $7,8 billion in 2021 to $9,5 billion largely underpinned by the improved volumes of transactions, which were being processed on our various service channels,” said Mr Nyanhongo.
He said the bank’s trading revenue improved, supported largely by the better trading activity in the market combined with revaluation gains recorded on foreign currency positions. The bank’s credit impairments ended the period at $1,1 billion after growing from a net release of $305 million in the same prior period, on the back of new lending assets, which were written during the period.
In the prior period, significant recoveries were recorded on the bank’s financial assets.
Total operating expenses increased by 50 percent from $9,4 billion in the comparative period last year to $14,2 billion largely because of the impact of the continued weakening of Zimbabwe currency against the US dollar on the bank’s foreign denominated expenses, which have increased substantially in local currency terms.
The bank’s net lending book grew in real terms by 10 percent to $74,8 billion as new lending assets were written in an effort to support clients in meeting their working capital requirements.
Mr Nyanhongo said Stanbic continued to support its customers through the provision of the required funding structures to meet their specific needs. Some of the availed funds went towards purchase of additional road construction equipment and working capital to fulfil the Government’s road rehabilitation programme that will improve the efficiencies with which goods and services are transported within Zimbabwe and into the region.
“The repaving of the Beitbridge – Chirundu Highway which is the main trade facilitation route between Durban, South Africa and the Northern countries – Zimbabwe, Zambia and DRC is providing employment to communities around the project thus improving rural incomes.
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