Steward Bank consolidates profitability, posts $4,3m profit
STEWARD Bank has maintained its profitability for the fourth quarter running after registering a 64 percent growth of $4,3 million profit before tax in the half year ended August 31, 2016.
In the same period last year, the Econet Wireless Zimbabwe’s banking subsidiary registered a $2,6 million profit before tax.
In a statement accompanying the bank’s unaudited financial results for the period under review, the chairman, Mr Bernard Chidzero said:
“Having turned a profit in the last financial year, I am pleased to announce that the bank has recorded a 4th consecutive quarter of strong growth, registering a 64 percent rise in profit before tax to $4,3 million compared to $2,6 million in the same period last year.”
He said in line with the bank’s transactional strategy, the financial institution realised a 44 percent growth in Non-Funded Income from increased customer transactions, accelerated performance from pioneering channels such as agent banking.
This was in light of the public embracing the use of plastic money and mobile money on the back of the increased awareness campaign by the Reserve Bank of Zimbabwe in response to cash shortages presently being experienced in the country.
“I attribute the growth to our bold strategy to pursue a new banking model anchored on transactional banking and a seamless integration with the EcoCash mobile money platform as a central pillar. Our strong brand presence has led to a surge in client growth, with over 120 000 new clients joining Steward Bank in the past six months,” said Mr Chidzero.
He attributed this to free banking account linked to various digital platforms that offers retail and corporate customers digital alternatives to cash.
Mr Chidzero said the bank’s capital position remains strong with a core capital base of $37,6 million as at August 31. Steward Bank, formerly TN Bank before Econet Wireless Zimbabwe Limited acquired a 100 percent shareholding in January 2013, was struggling until the shareholder change. The bank turned the corner in the financial year ended February 2015 and, has tailored a model that appears suited to Zimbabwe’s current liquidity crisis.
The financial institution’s liquidity position improved by 17 percent to close at 77 percent over the past six months.
“The adverse macro-economic conditions require us to be cautious in our assessment of our client’s ability to repay advances. Under the prevailing economic circumstances, as a responsible lender, the bank has remained conservative in issuing new loans. Consequently, net interest income declined by 20 percent to $3,6 million whilst the bank’s interest bearing assets reduced by eight percent to $94 million as at August 31, 2016, from $102 million in the same period,” he said.
Going forward, he said, Steward bank board and management was optimistic of a promising future despite economic headwinds.
“Our competitive advantage will continue to be defined by our embedded culture of innovation and quick adaptation, making banking convenient, accessible and affordable to every Zimbabwean,” he said.