Stew­ard Bank con­sol­i­dates prof­itabil­ity, posts $4,3m profit

Chronicle (Zimbabwe) - - Business - Busi­ness Re­porter

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.

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