Stanbic back in the black
BUSINESS REPORTER
Stanbic Bank has returned to profitability with inflation adjusted profit after tax of ZWL$1.1bn in the year to December 31 2020 from a loss of ZW$44m in 2019 on the back of a jump in non-funded income.
Net fee and commission income grew by more than half to ZWL$2.6bn in the reviewed period from ZWL$1.7bn in 2019.
“The improvement in our fee and commission income was largely underpinned by the impact of the rapid depreciation of the local currency against the USD on our foreign denominated commission income,” said CEO Solomon Nyanhongo.
Inflation adjusted net interest income declined by 18% to ZWL$1.7bn from ZWL$2bn in 2019 despite the strong growth in the bank’s gross lending book from an inflation adjusted balance of ZW$4.3 billion to ZW$9 billion as demand for local currency funding continued to increase in line with growing working capital requirements.
Nyanhongo said lending rates remained subdued during the year and could not match the 14% average month on month inflation on account of market and regulatory constraints and, in turn, contributed to the receding interest income.
In a statement accompanying the results, Stanbic’s board chairman, Gregory Sebborn, said the bank ended the year with a qualifying core capital of ZWL$3.8bn up from the 2019 figure of ZW$651.2m, well ahead of the regulatory minimum of ZW$25m. The leading financial services institution has remained ahead of the 2021 minimum capital threshold which is the local currency equivalent of US$30 million.
Stanbic Bank supported some of its large corporate clients with foreign currency to enable them to continue producing ethanol which is the key ingredient in producing alcohol-based sanitisers.
Some pharmaceutical producers were provided with foreign currency for the purchase of raw materials necessary to manufacture drugs, helping to ensure the health sector maintains the required levels of medication for patients.
“A total of US$145 000 in foreign currency was provided to other clients to procure sanitisers and sterilisation chemicals. We also facilitated the acquisition of medicines and hospital equipment by some of our clients in the health sector totaling US$2.5m,” Sebborn said.
