Ecobank Zimbabwe Limited (EZL), a unit of Pan -African Ecobank group, has posted an after -tax profit of $133 000 for the six months to June, spurred by the growth in incomes, from a loss of $1,4 million recorded during the same period last year.
Non-interest income nearly trebled to $3,1 million during the period under review compared to $1,1 million generated in the same period last year.
Net interest income rose to $2,1 million during the period under review from $1,3 million in June 2011. Banks generate their revenues from three broad sources, net interest income, fee and commission from automated teller machines, Internet banking and point-of-sale devices and trading revenue. Interest income is derived from interest charged on loans.
EZL was aggressive on the market resulting in loans and advances growing to $62,3 million in June 2012 from $36,9 million during the same period last year.
This development comes at a time when the predominantly locally-owned banking institutions have been conservative in their lending owing to a high level of non-performing loans and the transitory nature of bank deposits.
The level of non-performing loans in the banking sector rose to 9,9% in June 2012 from 5,9% recorded in December 2011, a figure way above the international standard of 5%.
Banking sector credit expanded by 18% to $3,3 billion while aggregate deposits grew by 31, 8% to $4 billion during the first half of 2012 from $3,1 billion in December 2011. EZL assets were up 38% to $80 million buoyed by growth in customer deposits.
“This was driven by a 39% increase in customer deposits to $63,2 million and a 69% increase in loans to customers up to $62,4 million,” reads a statement accompanying the financials.
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In March, EZL converted its merchant banking licence into commercial bank following the injection $7,5 million.
EZL shareholders have in the last one-and- half years injected $19,8 million into the bank, placing the bank on course to meet revised capital requirements set by the Reserve Bank of Zimbabwe recently.
The central bank raised capital levels for commercial banks to $100 million from $12,5 million with banks expected to raise $25 million by year-end in a staggered capitalisation exercise. The bank also announced that credit lines worth $25 million had been sourced from United Arab Emirates-headquartered Mashreq Bank and regional bank Afreximbank with 60% of this expected to be channelled for off-balance sheet financing.
EZL further announced that $10 million in lines of credit had been extended by other Ecobank affiliates to support regional trade finance.
