The People’s Own Savings Bank (POSB) interest income increased by 9% to $7,19 million during the first half of the year from the same period last year due to a growth in the loan book and Treasury investment portfolio.
BY VICTORIA MTOMBA
In a statement accompanying the group’s results, POSB chairperson Matilda Dzumbunu said the economic fundamentals remained weak in the first half of 2016, as the economy continued to face challenges such as weak aggregate demand, low foreign direct investment and serious liquidity constraints.
“Despite the challenges being faced in the economy and the banking sector, the bank posted a profit of $4,17m for the first year. The reduction was mainly driven by high operating costs, as the bank sought to broaden its product and services offering to its customers,” she said.
Profit after tax declined by 24% during the first half of 2016 to $4,17m from $5,45m during the same period last year.
Non-interest income went up by 17% to $12,08m compared to $10,35m in June 2015 due to the introduction of new products and services that had an impact on the fees income.
Operating expenses were up by 16% to $13,14m from $11,35m in June 2015. Total bank deposits grew by 15% to $107,47m from $93,68m due to aggressive deposit mobilisation through promoting new and existing products. Total assets increased by 11% to $148,95m from $133,70m in December 2015 due to a growth in business.
In the outlook, Dzumbunu said the bank would continue pursuing new initiatives in order to enhance its role in banking and remain a competitive player in the country’s financial services sector.
She said the major challenge for banks was the shortage of cash hampering the survival of the banking sector, which was on a recovery path since dollarisation.