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Stanbic Bank Zimbabwe has exceeded $1 billion deposits in the financial year ended December 31, 2017.The bank’s customers are, however, struggling to settle foreign payments as a result of foreign currency shortages.
Since last year, Zimbabwe’s banking institutions have been facing the depletion of nostro accounts used in funding foreign payments. The trend has created chronic settlement challenges for international payments resulting in most banks having backlogs for telegraphic transfers.
“As the country remained crippled by chronic foreign currency shortages, the bank’s customer deposit base increased from $701 million in 2016 to close the year at $1.2 billion as depositors failed to utilise their funds for settlement of foreign obligations,” chief executive officer, Mr Joshua Tapambgwa, said.
Stanbic Bank defied various economic challenges, which among others included unbearable cash and foreign currency shortages, to post an impressive set of results for the year headlined by a profit after tax of $27.6 million, up 30 percent from the prior year’s $21.2 million. Chairman, Gregory Sebborn, attributed the performance to the returns on the various interest earning instruments that the leading financial services institution invested in.
He, however, said the 2017 fee and commission income deteriorated from $33.5 million in the prior period to $32.6 million as the increased surrender requirements on platinum and chrome exports had a negative impact on the volumes of customer foreign payments, which the financial institution could not process as nostro reserves remained depleted.
“The charge for credit impairments for 2017 was $2.1 million having declined from $8.4 million in 2016 as the bank’s enhanced collection efforts on non-performing loans and reduced written off facilities continued to bear positive results,” said Mr Tapambgwa.
During the period, total operating expenses increased by 12 percent from $57.5 million in the prior year to $64.1 million largely because of the impact of business expansion as the bank remained competitive by rolling out new products into the market as well as extending its digital channels customer offering.
Stanbic Bank’s net lending book increased by 21 percent from $273.5 million in 2016 to $330.4 million largely driven by new assets, which were written, combined with the increase in facility utilisation by some counterparties who required local funding for working.
Mr Tapambgwa expressed gratitude to the Stanbic Bank team for the pleasant results, which he said would not have been possible without their resilience, team work and commitment to serve customers better in a difficult operating environment. The Chronicle