adminStanbic Bank Zimbabwe has defied the prevailing economic environment to post an impressive set of results which have seen its profit jump by nearly US$3 million to US$20,7 million for the year ended 31 December 2014 from the prior year.
A statement accompanying results for the year to 31 December 2014 shows that Stanbic Bank Zimbabwe’s fee and commission income grew by 13,6% from US$30,4 million to US$34,5 million.
This was attributable to the increase in the value of assets under custody to around US$1,1 billion compounded by the increase in transaction volumes on the bank’s service channels.
Stanbic Bank Zimbabwe chairman Sternford Moyo said in the statement the bank’s lending book declined marginally to US$252 million largely due to temporary decline in facility utilisation by some of its customers.
Operating expenses increased by 5 percent, mainly due to the increase in transaction processing costs incurred in activities such as cash importation and repatriation.
The impressive set of results came soon after the bank was recently named the Best Emerging Markets Bank in Zimbabwe by the Global Finance magazine.
Moyo said the bank’s qualifying core capital stood at US$78,5 million against the regulatory minimum of US$25 million and as one of the country’s leading financial services institutions is well on the path to achieving the regulatory requirements of US$100 million qualifying capital by 2020.
This achievement comes against a challenging operating environment throughout the financial year characterised by subdued international commodity prices for Zimbabwe’s key exports including gold, platinum, ferrochrome and cotton lint.
Moyo said deflationary pressures as evidenced by negative annual average inflation depressed company profitability levels and generally low internal demand for goods and services were some of the challenges which Stanbic Bank defied en route to a commendable profit.
The industry’s rising non-performing loans (NPL) closed the year at a market average of 16 percent having been at 15,92 percent in December 2013, peaking at 20,14 percent in September 2014.
Other issues that dogged the operating environment included loss of export competitiveness to key competitors in the region due to the use of a stronger currency, limited long-term capital, low foreign direct investments (FDI) and constrained lines of credit, power shortages and stiff competition from imports, among others.
“In the outlook to 2015, the country’s economic growth prospects remain weak with marginal growth projected in key sectors such as mining, telecommunications and agriculture. We remain confident that we will achieve the 2015 targets despite the challenges faced by the economy,” said Moyo.
He said Stanbic Bank Zimbabwe continued to maintain high standards of corporate governance ensuring that its conduct is above reproach.
The bank complies with regulatory and corporate governance requirements and is committed to advancing the principles and practice of sustainable development and adherence to the laws of the country.
“During the period under review, the bank complied with all regulatory requirements and RBZ directives in all material respects,” said Moyo.
Stanbic Bank’s approach to corporate social responsibility (CSR) is to use its available resource and partnerships to identify and assist communities in ways that bring about long-term changes.
The bank’s CSR focus is across different areas including health, education, arts and sports, among other initiatives.
Moyo said Stanbic Bank’s CSR efforts help it to invest in and improve its communities, through its own resources and the strong relationships it has with its customers, investors, partners and other stakeholders . . . This also helps to build connections that go beyond financial transactions.
He said effective risk management is fundamental to the business activities of the bank adding that while it was committed to the objective increasing shareholder value, the bank was also cognisant of the need to balance between risk and reward in its business and continue to build and enhance the risk management capabilities that assist in delivering the bank’s plans in a controlled environment.
“Risk management is at the core of the operating structures of the bank. The bank seeks to limit adverse variations in earnings and equity by managing the risk exposures and capital within agreed levels of risk appetite.
“Managing and controlling risks, minimising undue concentrations of exposure and limiting potential losses from stress events are all essential elements of the bank’s risk management and control framework.
“This framework ultimately leads to the protection of the bank’s reputation,” said Moyo.
Stanbic Bank Zimbabwe is a subsidiary of Standard Bank Group which is the largest African bank by assets with a unique footprint across 20 African countries.
Standard Bank Group is headquartered in Johannesburg, South Africa, and is listed on the Johannesburg Stock Exchange.
Standard Bank has a 153-year history in South Africa and started building a franchise outside Southern Africa in the early 1990s.
Its strategic position, which enables the group to connect Africa to other select emerging markets as well as pools of capital in developed markets, and its balanced portfolio of businesses, provides significant opportunities for growth.
Online Reporter