One of Africa’s largest lenders, Standard Bank Group, says it has shifted the functional currency of its Zimbabwean unit to the US dollar after determining that more than 80% of the subsidiary’s balance sheet is in the American currency.
The move by Stanbic Bank Zimbabwe’s parent comes as the group seeks to contain currency risk in a volatile market.
Responding to businessdigest during an interface with shareholders and analysts following the release of the group’s 2025 annual results, chief finance and value management officer Arno Daehnke said the Zimbabwe unit remains profitable.
“We have consistently repatriated dividends from Zimbabwe over the years, with limited constraints,” Daehnke said.
“However, foreign exchange revaluation gains boosted trading revenue in the prior period and were not repeated in 2025, resulting in more subdued earnings from Zimbabwe,” he added.
Daehnke said the decision to adopt the US dollar as Stanbic’s functional currency was informed by the structure of the bank’s balance sheet.
“At the beginning of the year, we converted the functional currency of that entity to US dollars because more than 80% of our balance sheet in Zimbabwe is dollar-denominated deposits and assets,” he said.
The shift demonstrates the group’s growing preference for hard currency positioning in Zimbabwe, where exchange rate instability has distorted earnings and balance sheets across markets. The lender said its move better reflected the structure of its local subsidiary, whose deposits and lending book are now largely in US dollars.
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The group reported a 9% decline in trading revenue from its South and Central African operations last year, largely due to the non-recurrence of foreign exchange gains recorded in Zimbabwe during the previous period.
Daehnke said Zimbabwe remains a strategically important market.
“We continue to see a valuable franchise in Zimbabwe, now denominated in US dollars, and are managing our risk and currency exposures in that entity successfully,” he said. “It remains profitable and would have delivered a reasonably strong performance were it not for the base effects of the prior year’s currency revaluation.”
Stanbic’s financials indicate underlying growth in core banking activity despite earnings volatility linked to currency effects.
The bank posted profit after tax of ZiG682,2 million for the half year to June 2025, up from ZiG27,1 million in the comparable period.
Net interest income rose to ZiG840 million from ZiG374 million, driven by loan book expansion and increased demand for credit, particularly in foreign currency.
Net loans and advances grew from ZiG8,4 billion in December 2024 to ZiG10 billion, reflecting a shift toward US dollar-denominated lending in response to market demand.
Zimbabwean firms are expected to report for the year to December 31, 2025 in the coming weeks.
Standard Bank said macro-economic recovery in South and Central Africa remained constrained in 2025, weighed down by drought conditions and persistent inflationary pressures across several markets.
