Leading financial services institution, Stanbic Bank Zimbabwe has posted a $12.8 million profit for the half year to June 30, 2017, up from $10.5 million in the comparable period last year.
Stanbic Bank Zimbabwe Chairman Greg Sebborn attributed the competitive set of results to better net interest income buoyed by additional short term investments acquired during the period. Sebborn said strengthened collection efforts on non-performing loans also contributed significantly.
“Notwithstanding the elevated turbulence in the macro-economic environment, the Bank recorded a commendable performance closing the first half of the year with a profit of $12.8m in comparison to the prior period profit of $10.5m. Non-funded income also performed strongly as the Bank continues to drive various electronic means of payment as the market continues to embrace the digital platforms,” said Sebborn.
As at 30 June 2017, Stanbic Bank’s qualifying core capital stood at $119.5m up from $95.3m in June 2016 and well above the regulatory minimum of $25m.
The $119.5m qualifying core capital puts Stanbic Bank in a healthy position ahead of the year 2020 regulatory minimum core capital of $100 million.
Stanbic Bank, a subsidiary of Standard Bank Group of South Africa, will remain compliant with capital requirements after IFRS 9 becomes effective on 1 January 2018.
Sebborn noted that The International Monetary Fund (IMF) and the World Bank projected the Zimbabwe economy to grow by an estimated 3% in 2017 compared to a modest growth of 0.6% in 2016. The two international bodies based their forecast on the back of a better performance in agriculture as a result of a good rainfall season and timeous financial support to the sector by the government, private players and development partners.
The partial recovery in international mineral prices as well as viability gains driven by Government’s review of royalties is providing growth impetus to the mining sector. The positive developments in agriculture and mining are extending stimuli to other sectors of the economy, providing overall positive growth prospects for 2017.
The IMF and World Bank have also singled out the excessive money supply growth fuelled by the financing of the fiscal deficit as a significant threat towards price stabilization and sustainable growth. There is need for concerted efforts towards implementation of policies which promote local industrial growth and generation of increased foreign currency.
Sebborn said Stanbic Bank continues to maintain high standards of corporate governance, ensuring that its conduct is above reproach. It 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, Stanbic Bank complied with regulatory requirements and central bank directives, in all material respects.
Stanbic Bank continues to channel resources towards taking care of its communities. The Bank also supports developmental initiatives and projects initiated by other individuals or groups who have taken it upon themselves to address different needs in their own communities.
“These activities are our responsibility, and as a business, we believe they are a worthwhile investment whose benefits make communities’ livelihoods better in both the short and the long-term. Our CSR aims are to bring all stakeholders’ insights and passion together, from our employees, our shareholders and the communities at large,” said Sebborn.
Stanbic Bank Chief Executive, Joshua Tapambgwa was pleased that the institution overcame the increasing vulnerabilities in the economic environment to do well.
Giving the run-down of the performance, Tapambgwa said net interest income of $25.5m grew by 11% from $23.1m as additional short term financial investments were acquired during the period under review.
The growth in net interest income was partially offset by the temporary fluctuations in facility utilisation such as the deterioration in the volume of cash transactions and outgoing customer foreign payments, a development which saw bank fees and commission income decline by 4%.
Tapambgwa said that Stanbic Bank is focused on ensuring that the lives of its customers are made easier as they navigate an increasingly difficult operating environment as evidenced by the continued digital banking journey in a cash-starved environment, where Stanbic Bank rolled out more POS devices into the market.
“Our digital banking product suite was enhanced through the addition of more billers on our Blue247 mobile banking platform compounded by the introduction of new products such as Online Banking for Small to Medium Enterprise clients. As we strive to diligently serve our customers, low cost options of sending money to mobile wallets and agent banks were introduced”, he said
The bank also indicated that their CSR commitments will continue to be at the service of the communities. “Since January 2017 to date, we have engaged a number of communities and taken heed of their needs. So far we have managed to support stakeholders that include Jairos Jiri, Parirenyatwa Group of Hospitals, National Blood Services of Zimbabwe (NBSZ), Nyarutombo Primary School (Muzarabani), Gweru Memorial Library, and the Albino Charity Organization of Zimbabwe (ALCOZ). Furthermore, tuition fees have been provided for a number of secondary school and university students. As the year progresses, our aim is to complete other community projects that are currently underway to ensure that 2017 is recorded as a memorable year for these societies. We will continue to reach out to communities through our CSR strategy focusing on Health, Education, Environment, and the Arts for the betterment of lives across Zimbabwe”, explained Tapambgwa.
The Chief Executive commended the resilience of the Stanbic Bank team for rising above the evident challenges in the harsh operating environment adding that the performance achieved in the period under review is a testament of their strong capabilities and team work without which these results could not have been achieved.