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Stanbic profits up 44%

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Stanbic Bank reported a 44% increase in profits to $11,1 million for the year ended December 2011, but warned lack of long-term capital and limited lines of credit remained major constraints to Zimbabwe’s economic growth.

The bank, which is a subsidiary of South Africa’s Standard Bank group, said the growth momentum of the economy continued last year, albeit at a slower pace.

Stanbic chairman Stenford Moyo, in a statement accompanying its financial results, said since the adoption of a multiple currency system, the economy had stabilised resulting in single digit inflation, increase in customer deposits and rise in industrial capacity utilisation.

“Notwithstanding the encouraging developments stated above, the economy’s growth prospects are still constrained by power shortages, uncertainty regarding the implementation of the indigenisation and economic empowerment regulations, tight liquidity situation and lack of a vibrant interbank market, which inhibits lending by banks,” said Moyo.

The indigenisation drive has caused a lot of anxiety in foreign-owned companies. Under the Act, all foreign-owned companies are required to dispose of at least 51% of their equity to locals.

Several companies, including mining giant Impala Platinum Mines, Unki and Caledonia, have agreed to let go of their majority stakes in their respective companies.

Stanbic, Barclays Plc and Standard Chartered Plc have come under pressure from Indigenisation and Economic Empowerment minister Kasukuwere to comply.

Fees and income commissions contributed 43% to the bank’s total income of $56 million.

Net interest income contribution amounted to 45% with gross loans and advances increasing from $100 million to $161 million.

As at December last year, the bank’s capital stood at $34,5 million against the Reserve Bank of Zimbabwe’s minimum requirement of $12,5 million for commercial banks.

Moyo said there was need to step up efforts to improve the country’s investment climate in order to attract capital.

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