PHILLIMON MHLANGA
Ecobank Zimbabwe posted the biggest jump in non-interest income
during the 12 months to December 2019, helping profit overcome headwinds from lower interest rates.
The pan-African lender’s profit rose 1,895% driven by a 3,067%
increase in non-interest income in the reviewed period.
The shift in the rise of the noninterest income sterilised the lender’s
financial performance following uncertainties surrounding interest
income after the central bank directed all banks to cut interest
rates.
The non-funded income, such as fees and commissions among
many grew by 3 067% during the 12 months period to December
31, 2019, to ZWL$1.07bn from ZWL$33.8m, reported in the previous year.
Adjusted for inflation, the lender’s non-funded income was 369% up
to ZWL$1.3bn during the reviewed period from ZWL$269.3m in the
prior year.
Fees and commission income stood at ZWL$71.4m during the
reviewed period from ZWL$23m in the prior year on historical basis.
Ecobank’s historical profit stood at ZWL$798m at the end
of December from ZWL$40m in 2018.
On inflation-adjusted basis, profit jumped 990% to ZWL$598m
during the reviewed period from ZWL$54.9m in 2018.
“Growth in fees and commissions was driven by structured trade
finance products and import Letters of Credit,” Moses Kurenjekwa, the
bank’s managing director said.
The bank’s net interest income rose 231% on a historical basis and 22% down on an inflationadjusted basis.
Total operating income stood at ZWL$1.2bn on a historical basis from ZWL$80.4m, reflecting a 1,407% increase.
On an inflation-adjusted basis, total operating income increased 990% to ZWL$1.6bn during the reviewed period from ZWL$647.9m in 2018.
Operating profit was 1842% up to 1.02bn from ZWL$53m on a historical basis. On inflationadjusted basis went up 192% to ZWL$1.3bn from ZWL$428m.
The bank recorded a net monetary loss of ZWL$159m during the
reviewed period.
“This was a result of the composition of the bank’s balance sheet that is dominated by monetary assets and liabilities.
The impact of
the loss was reduced by the bank’s ability to facilitate structured trade
finance products and import letters of credit,” Fortunate Chisango,
Ecobank chairman said.
Taxation of ZWL$497m arose mainly from deferred tax on the uplifted inflation-adjusted earnings, Chisango said. Total assets grew 700% to 8bn from ZWL$1.893bn on a historical basis. On an inflationadjusted basis, total assets grew to ZWL$8bn from ZWL$6.5bn.
