ECOBANK Zimbabwe Limited net interest income grew by 2% for the year ended December 31, 2015 to $16,95 million on the back of higher lending volumes, the bank said.
BY VICTORIA MTOMBA
During the same period in 2014, net interest income was $16,6 million.
Ecobank managing director Daniel Sackey said in spite of the challenging macro-economic environment that has subsisted throughout this period, significant progress has been made in growing the business as evidenced by the five-year compound annual growth rates of 32% in total assets, 35% in loans and advances, and 13% in customer deposits.
“Net interest income grew by 2% on the back of higher lending volumes which saw loans and advances growing by 30%. This alleviated the impact of falling lending margins due to regulatory and market forces,” he said.
“To support the increased lending volumes, the bank accessed increased foreign lines of credit and successfully grew customer deposits by 65% through various deposits mobilisation efforts.”
He said net fees and commissions registered a growth of 31% driven by higher customer transaction volumes and a growing finance portfolio. The bank registered a profit of $5,1 million during the period under review from $2,5 million in 2014 same period.
The bank’s chairman David Whatman said the macro and micro operating environment remained very tough with continuing and worsening challenges due to the deflationary conditions, low industrial and capacity utilisation of 34,4%, widening current account deficit as well as low foreign direct investments and foreign lines of credit.
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“The continued pressure to reduce interest rates and bank charges, couples with the reduction in national disposable income will present profitability challenges to the entire banking sector. Total national savings are not expected to improve in the short-term, thereby limiting the pool of funds that banks can in turn lend to all sectors of the economy,” he said.
Whatman said the strategies of the bank to access more niche funding opportunities and continually improve service within the branches will be reinforced by aligning a proven capacity and strength in electronic platforms and channels to these strategies.
