Stanbic Bank, a unit of South Africa-headquartered Standard Bank Group, nearly doubled its after tax profit for the six months ending June 30 to $6,5 million, spurred by strong growth in incomes.
The bank took an aggressive lending approach, increasing loans to $199 million from $153 million at a time when predominantly locally-owned banks had been cautious.
The development came at a time when lending rates, according to Reserve Bank of Zimbabwe figures, had declined to an average of 14,5% as at May this year from 19,6% in December 2011.
Total income leaped to $35 million from $25 million buoyed by net interest income.
Net interest income contributed 44% of the bank’s total income with gross loans and advances to customers increasing to $212 million as at June 30, from $161 million as at December 31 2011.
Non-interest income rose to $15,6 million from $10 million.
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.
Operating expenses were up 21% to $21,5 million driven by staff related costs.
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Stanbic chairman Sternford Moyo, in a statement accompanying the interim results, said price fluctuations on the commodities market, a top foreign currency earner in Zimbabwe, was likely to reduce export earnings.
“Given the over-reliance on the exportation of commodities for growth, the country’s growth trajectory will be negatively affected if commodity prices continue to plummet on the international market,” Moyo said.
“It is imperative for stakeholders to appreciate that local liquidity is not adequate to fully fund national requirements and, therefore, redoubled efforts should be channelled towards mobilising external lines of credit and improving the country’s investment climate to unlock positive net investment into key sectors of the economy.”
Despite the liquidity squeeze, total bank deposits in the entire banking system rose to $4 billion as at June from $3,1 billion as at December 31 2011, as confidence in the sector improves.
