Stanbic rebounds to record $607m profit

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One of the major local financial services providers, Stanbic Bank Zimbabwe, has recovered from a $624 million loss in the six-months to June last year to an impressive $607,2 million inflation adjusted profit after tax for the half year ending June 2020.

The bank, a subsidiary of Standard Bank Group of South Africa, attributed the stellar performance to an improvement in its non-funded income that includes trading revenue, fee and commission income and fair value adjustments on investment properties.

In a statement accompanying the results Stanbic Bank board chairman, Gregory Sebborn, said the bank ended the six-months to June 30, 2020 with a qualifying core capital of $2,1 billion surpassing the local currency equivalence of the required US$30 million regulatory minimum core capital that has been set for the end of 2020.

He said while the operating environment remained challenging, the economy recorded notable development in 2020 such as increases in power generation to levels estimated at 1 050MW  by the end of June 2020 from 660MW at the beginning of the year attributable to increase in water levels in Lake Kariba.

“Cereal production significantly increased mainly on the back of a rise in small grains output. Lastly, the trade deficit during the
first five months of 2020 narrowed to US$340 million compared to a deficit of US$400 million over the same period in 2019,” said Mr Sebborn.

Chief executive Joshua Tapambgwa, said net interest income for the period declined by 28 percent from $540 million to $389 million although the bank’s lending book had grown by 11 percent from $2,5 billion as at the end of December to $2,7 billion.

The bank’s lending rates remained stagnant on account of regulatory constraints, at a time when average monthly rates were around 18 percent.

“The bank registered a 23 percent growth in its fee and commission income, growing from $395 in the prior period to $486 million largely buttressed by the impact of the continued depreciation of our local currency against the USD on the foreign dominated commission income, which, in turn,  had increased substantially in local currency terms,” said Mr Tapambgwa.

He said fair value adjustments, which were recorded during the period on investment properties, underpinned the uplift in the bank’s inflation adjusted total income that grew by 108 percent from $1,4 billion as at the end of June 2019 to $2,9 billion.

He said the acquisition of new lending and investment assets during the period saw the bank’s credit impairments growing by 263 percent from $115 million to $386 million.

“In addition, the bank reassessed the quality of its lending book following the outbreak of Covid-19 and its impact on business operations in key industries such as agriculture, manufacturing and tourism with the latter being the hardest hit so far, resulting in additional impairments being recorded,” said Mr  Tapambgwa.

Commenting on the bank’s Corporate Social Investment (CSI) drive, Mr Tapambgwa noted that the year began on an unsettling note as the world woke up at war with Covid-19 pandemic.

He acknowledged that it has been a trying year for humanity adding that Stanbic Bank joined hands with Government and many other well-wishers by providing equipment worth US$200 000.

“The equipment comprised five ventilators, personal protective equipment (PPEs in the form of protective suits, goggles, N95 masks, surgical masks and face shields; 2 400 PCR tests, sanitisers and two boreholes),” he revealed.

The PPEs were handed over to St Anne’s Hospital, Wilkins Hospital, Thorngrove Hospital, Mutare Infectious Diseases Hospital, Gweru Provincial Hospital and Masvingo Provincial Hospital.

The five ventilators were handed over to Thorngrove Hospital, Parirenyatwa Hospital, St Anne’s Hospital and United Bulawayo Hospital while the two boreholes were drilled in Cowdry Park — Bulawayo and Glen Norah C — Harare to help these communities with better access to clean and safe water. – Sunday MAIL