Stanbic posts impressive results in FY21
BUSINESS REPORTER
Leading financial services institution, Stanbic Bank has shrugged off the adverse effects of the Covid-19-induced lockdowns to post an inflation adjusted profit after tax of ZWL$ 5.2bn for the year ended December 31, 2021.
The net profit was up 185% from the ZWL$1.8bn realised in 2020.
The impressive set of results by the Standard Bank group subsidiary also saw it achieve a profit of ZWL$7.4bn under the historical cost accounts, outpacing the prior period of ZWL$3.2bn.
In a statement accompanying the results, Stanbic Bank chairman, Gregory Sebborn said the bank ended the year with a core capital of ZWL$11.3bn, up from ZWL$3.8bn in 2020. This equates to US$103.7m against the regulatory minimum of the local currency equivalent of US$30m.
Stanbic Bank CE Solomon Nyanhongo said the year 2021 was a difficult one on account of the Covid-19 pandemic which saw blanket lockdown conditions being introduced in the first two months of the year as the number of infections soared. The lockdown conditions had an adverse impact on the level of business activity in the first quarter of the year.
However, the subsequent mild relaxation of lockdown conditions contributed positively to the recovery of the economy as most businesses were now able to operate with minimal disruptions, as the country’s vaccination level improved.
Nyanhongo said this also contributed significantly to the bank’s positive performance which saw the 2021 inflation adjusted net interest income surge by 206% from ZWL$2.7bn in 2020 to ZWL$8.1bn, largely underpinned by the improved growth in the bank’s average interest earning assets from ZWL$411.7bn to ZWL$34.1bn as new lending assets and financial investments were acquired.
The bank recorded a 72% increase in its net fee and commission income, growing from ZWL$4.2bn in 2020 to ZWL$7.3bn.
“The relaxation of the lockdown conditions led to the uplift in the volumes of transactions which were passing through our various service channels. However, the persistent foreign currency shortages on the foreign currency market impacted negatively on the level of trading activity resulting in depressed trading revenue,” Nyanhongo said.
The 2021 inflation adjusted credit impairments improved ZWL$320m from ZWL$1.2bn in the prior period, largely supported by the strong recoveries which were recorded during the period on the bank’s financial assets.
Nyanhongo said Stanbic’s inflation adjusted operating expenses grew by 3% ZWL$8.9bn last year from ZWL$8.6bn in 2020. This growth was largely driven by the once off costs which were incurred as the Bank completed its staff optimization project.
“This was compounded by the impact of exchange rate movements on our foreign denominated operating expenses which include, among others, licence fees, data lines, insurance and franchise fees.
The Bank’s customer deposit base grew on a historical cost basis from ZWL35.5 billion in 2020 to ZWL91.8 billion largely underpinned by the uplift in our foreign currency deposits combined with the increase in money supply,” said Nyanhongo.
