Friday, July 12, 2024
HomeBusinessStanbic Posts 572% Growth In Profit For H1 2023

Stanbic Posts 572% Growth In Profit For H1 2023

Harare, 31 August 2023 – Stanbic Bank has posted an inflation adjusted profit after tax of ZWL 373 billion for the six months ended 30 June 2023, growing from the ZWL56 billion recorded in the prior period.

In a statement accompanying the results, Stanbic Bank Chairman, Gregory Sebborn, attributed the growth in profit for the period largely to the increase in foreign currency denominated transaction volumes as business operations continued to shift from local to foreign currency, combined with the improved tobacco crop.

 “In addition, new lending assets were written during the period in both local and foreign currency on the back of elevated demand for working capital by customers,” said Sebborn.

He said Stanbic Bank ended the six months period to 30 June 2023 with a qualifying core capital of ZWL552 billion, equivalent to USD96.2 million and against a minimum capital requirement of the ZWL equivalent of USD30 million.

In a detailed overview of the results, Stanbic Chief Executive (CE), Solomon Nyanhongo, said the Bank’s net interest income closed the period at ZWL135 billion, surpassing prior period income of ZWL61 billion by 122%.

Nyanhongo said this growth was largely underpinned by the uplift in the Bank’s average lending book which grew from ZWL73 billion in June 2022 to ZWL941 billion due to heightened demand for foreign currency funding by customers avoiding the high interest rates on local currency facilities, coupled with increased dollarisation of the economy.

“The Bank recorded growth in fee and commission income which ended the period at ZWL130 billion up from ZWL47 billion in the comparative period. This growth was largely reinforced by the increased volumes of foreign currency transactions which were now being processed on our various service channels as business operations were shifting from local currency to foreign currency,” said Nyanhongo.

He said acquisition of new customers during the period, combined with improved customer transactability and increased utilisation of digital solutions, also contributed to the growth in fee and commission income.

Nyanhongo said a net release of ZWL11 billion was recorded in credit impairments during the first half of the year, improving from a net raise of ZWL6 billion in the prior period.

ALSO ON 263Chat:  Stanbic Bank Lays Foundation For HQ In Borrowdale

“The release in expected credit loss allowances was largely driven by the improvement in the quality of the Bank’s lending book following the February 2023 interest rate reduction on local currency lending from 200% to 150%. Total operating expenses increased by 135% from ZWL69 billion in the comparative period to ZWL163 billion largely because of the impact of the continued weakening of the ZWL currency against the USD on the Bank’s foreign denominated expenses which have increased substantially in local currency terms,” said Nyanhongo.

Stanbic’s net lending book grew from ZWL489 billion in December 2022 to ZWL1.4 trillion largely spurred by the growing demand for foreign currency loans which saw new lending assets being written as the institution continued to support its customers in their funding requirements.

Nyanhongo noted that the stable operating environment which had prevailed in the last quarter of 2022 persisted into the first quarter of 2023 characterised by a slowdown in inflation and moderate currency depreciation.

He, however, noted that this conducive environment was short-lived as ZWL prices of goods and services rose markedly in the second quarter of the year, coupled with a rapid deprecation of the ZWL: USD exchange rate.

Sebborn said the Standard Bank Group subsidiary paid keen attention to Sustainable Corporate Social Responsibility opportunities as it pursues business in various industries. He said this is in line with the bank’s commitment to drive the growth in Africa and Zimbabwe.

“The Bank has established partnerships through its Corporate Social Investment policy in various provinces in Zimbabwe, supporting these communities in the aspects of health, education and sanitation,” said Sebborn.

Nyanhongo added that, for the 8th year running, Stanbic Bank donated sunscreen lotion, antibacterial soap, antiseptic liquid, lip balm and sunhats worth ZWL39 million to the Albino Charity Organization of Zimbabwe (“ALCOZ”).

“The Bank is committed to supporting education and has made significant strides in spreading educational bursaries around the country.  Engagements have begun with several tertiary and primary institutions to onboard students on bursaries to replicate our partnership with Africa University. We are currently assisting five students at Africa University, five students at University of Zimbabwe, one student at St Giles Medical School as well as one student at Mufakose2 High School,” said Nyanhongo.

ALSO ON 263Chat:  OK Zimbabwe Appoints New Board Chairperson

He said the strength of Stanbic’s financial outcome continues to be driven by the unique contributions of the resilient staff members.

“Once again, we proved our steadfastness in the face of an increasingly fluid operating environment as we strive to remain relevant in our chosen market, serving our clients better. We have set ambitious targets for ourselves, and I remain confident that our Leadership Culture journey, our future skills curriculum and the continued reinforcement of our risk and conduct strategic value driver, will propel us into a prosperous second half of the year,” he said.

Nyanhongo also paid tribute to Stanbic’s customers and stakeholders for their untiring support throughout the period.

He said transforming client experience remains one of Stanbic Bank’s strategic priorities. To that end, the institution’s client engagement drive has seen its teams directing their energies towards obtaining critical client insights into how the Bank can provide lasting financial solutions to its customers.

“Partnering our customers for growth entails being proactive in providing financial and advisory support that will result in our customers growing and running sustainable businesses. Stanbic Bank continues to capacitate its customers with the information and tools that they need to facilitate trade,” he said.

Nyanhongo said through the Africa- China import solution, the Bank succeeded in bridging language barriers and created value for customers by reducing the number of middlemen between original equipment manufacturers and importers.

The Bank’s Africa China Trade Solutions team partnered with the Zimtrade to host businesses attending the Zim- China Business Forum. This partnership has helped local businesses showcase their products and services in new export markets in China.

“There is a huge opportunity in citrus and nuts where the Bank and Zimtrade have also managed to open trade links for local producers,” said Nyanhongo.

Share this article
Written by

I am a conscientious person who works hard and likes to think outside the box. I'm flexible, quick to pick up new skills and eager to learn from others. I also have lots of ideas and enthusiasm for creative projects. I am a fast and accurate writer, with a keen eye for detail. Currently a reporter at 263Chat and a contributor to Divas Inc Online magazine.

No comments

Sorry, the comment form is closed at this time.

You cannot copy content of this page