STEWARD Bank Limited has recorded a $26,4 million loss for the year ended February 28 2014 due to non-recurring operating expenditure incurred during the ongoing business re-alignment process.
TARISAI MANDIZHA BUSINESS REPORTER
During the period under review, net interest income declined to $3,8 million from $11,2 million while non-interest income stood at $5 million from $10,5 million.
Operating loss relating to furniture loans stood at $16,7 million during the period under review.
In a statement accompanying the bank’s audited abridged financial statement, Steward Bank chairperson Oluwatomisin Fashina said net interest income declined in comparison to the previous financial period in light of reduced lending and a reduction of interest rates on outstanding loans.
Fashina said this reflected the full impact of downward pricing revisions and suspended interest on prudential provisioning.
Non-interest income declined because of reduced account activity and the resultant reclassification of inactive bank accounts, he said.
“The bank experienced a loss of $26,4 million over the period, on the back of non-recurring operating expenditure incurred during the ongoing business model re-alignment process,” Fashina.
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“The bank also incurred costs related to the rebranding exercise, closure of marginal bank branches as well as the de-commissioning of redundant information and communication technology infrastructure to pave way for new technologies aligned to the new business model.”
Commenting on the current operating environment, Fashina said the economy appeared to enter a deflationary cycle largely influenced by the prevailing liquidity crunch.
He said the economy grew at a reduced rate of 3% while total banking deposits were $4,7 billion as at December 31 2013.
Fashina added that funds circulating in the informal sector were estimated at between $2,5 billion and $7,4 billion.
