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Business Reporter
STANBIC Bank Zimbabwe has posted a US$39,3 million profit after tax for the year ended December 31, 2018, up from US$27,6 million in the prior year.
The financial institution recorded a 26 percent growth in net interest income up from US$55,1 million in the comparative period to US$69,7 million as it maintained focus on growing its interest earning assets, which in turn enhanced balance sheet efficiencies.
The bank’s strong drive on digitisation also contributed significantly to the results as fee and commission growth was driven by increased volumes being processed through its digital channels. This led to a rise in fee and commission to US$38,7 million up from US$32,6 million in 2017.
Stanbic chief executive, Mr Joshua Tapambgwa, said in a statement accompanying the results, the bank’s net lending book grew by 17 percent from US$330,4 million in 2017 to US$387 million, reinforced mainly by new lending assets, which were created in the period combined with an improvement in facility utilisation by some borrowing clients.
He said the worsening foreign currency shortages in the market, coupled with an increase in money supply, saw the bank’s customer deposit base growing from US$1,2 billion as at the end of 2017 to US$1,5 billion.
“Our depositors were unable to access their funds for the settlement of foreign obligations due to the scarcity of foreign currency, hence the growth in deposits,” said Mr Tapambgwa.
Stanbic chairman, Mr Gregory Sebborn, was pleased the bank fared well despite the plethora of economic challenges such as rising inflationary pressures, acute shortage of foreign currency and other imported commodities such as fuels, industrial raw materials and other consumables to post an impressive set of results.
Low productivity levels, waning business confidence and depressed international commodity prices for key exports, were some of the challenges that banks in general had to deal with in the last financial year.
Mr Sebborn said Stanbic ended the year with a qualifying core capital of US$162,2 million up from US$134,3 million in 2017 against the regulatory minimum of US$25 million.
This means the bank has remained well ahead of the 2020 minimum capital threshold of US$100 million after considering the effect of the new accounting standard IFRS 9 Financial Instruments, which became effective on January 1, 2018.
The first half of the year recorded positive economic performance, which unfortunately tailed off into a negative third quarter characterised by various challenges.
Although Government has announced various policy measures that are meant to stabilise the economy, it has not responded well to these measures and key challenges remain around containment and reduction of the fiscal deficit, resolution of the fuel crisis, which has crippled economic activity, resolving remuneration issues after incomes were eroded by the spike in inflation and the dislocation in the exchange rate environment, and attracting meaningful foreign direct investments, said Mr Sebborn.
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