STANDARD Chartered Bank of Zimbabwe Limited profit for the six months to June has narrowed to $7,2 million compared with $8 million over the same period last year due to growth in operating expenses.
Report by Tarisai Mandizha
Despite achieving a growth in net interest income, operating expenses increased to $23,2 million for the half year ended June 30 2013 compared to $18,1 million in 2012. The cost to income ratio deteriorated to 67% from 59% for the comparative period.
Net interest income rose to $12,1 million from $7,2 million in the same period last year.
In a statement accompanying the bank’s financial results for the half year ended June 30 2013, Standard Chartered Bank chairperson Samuel Rushwaya said the current economic environment weighed on the performance of the bank compared with the same period last year.
Zimbabwe’s economy, according to official figures, contracted by 3% during the first quarter of the year due to underperformance of mining and manufacturing.
“While the operating environment in the first half of 2013 has been challenging, the bank has performed well and continues to be well capitalised and highly liquid,” Rushwaya said.
He said while the bank recorded 4% growth in lending which translated to an increase in interest income, the overall income was weighed down by material decrease in non-funded income.
“This reflected the reduction in charges in line with the Memorandum of Understanding (Mou) signed between the Bankers’ Association of Zimbabwe and the Reserve Bank of Zimbabwe earlier in the year,” Rushwaya said.
Under the MoU, banks would, with effect from last February, charge up to 0,5% of the cash withdrawal amount subject to a minimum charge of $2,50, while ledger fees, maintenance and service fees will cost up to $4 per account.
The central bank and the bankers also agreed to push for the mandatory use of debit cards. Automated teller machines, according to the MOU, will now attract a withdrawal fee of $2. Rushwaya said the structure of deposits remained mostly short-term in nature and this militated against efforts to avail longer-term financing which was an essential ingredient for more sustained industry recovery.
“The current liquidity constraints continue to be exacerbated by the absence of an active interbank market and lender of last resort.
“Despite the challenges, Standard Chartered Bank remains committed to positively contributing to the economy through continued support to key sectors such as agriculture, trade, commodities and small to medium enterprises (SMEs),” Rushwaya said.