Stanbic Bank posted a USD39.3 million profit after tax for the year ended 31 December 2018, up from USD27.6 million in the prior year.
The performance was headlined by 26 percent growth in net interest income up from USD55.1 million in the comparative period to USD69.7 million as the Bank maintained its attention on growing its interest earning assets that in turn enhanced balance sheet efficiencies.
Stanbic Bank’s strong drive on digitisation also contributed significantly to the results as fee and commission growth was driven by increased volumes being processed through its digital channels. This led to a rise in fee and commission to US$38.7 million up from USD32.6 million in 2017.
In a statement accompanying the results, Stanbic Bank Chief Executive, Joshua Tapambgwa, said that Stanbic Bank’s net lending book grew by 17 percent from USD330.4 million in 2017 to USD387 million reinforced mainly by new lending assets that were created in the period combined with an improvement in facility utilisation by some borrowing clients.
He said the worsening foreign currency shortages in the market, coupled with an increase in money supply, saw the Bank’s customer deposit base growing from USD1.2 billion as at the end of 2017 to USD1.5 billion.
“Our depositors were unable to access their funds for the settlement of foreign obligations due to the scarcity of foreign currency, hence the growth in deposits,” said Mr Tapambgwa.
Stanbic Bank Chairman, Mr Gregory Sebborn, was pleased that the Bank fared well despite the plethora of economic challenges such as rising inflationary pressures, acute shortage of foreign currency and other imported commodities such as fuels, industrial raw materials and other consumables to post an impressive set of results. Low productivity levels, waning business confidence and depressed international commodity prices for key exports, were some of the challenges that banks in general had to deal with in the last financial year.
Mr Sebborn said the bank ended the year with a qualifying core capital of USD162.2 million up from USD134.3 million in 2017 against the regulatory minimum of USD25 million.
This means the Bank has remained well ahead of the 2020 minimum capital threshold of USD100 million after considering the effect of the new accounting standard IFRS 9 Financial Instruments which became effective on 1 January 2018.
“The first half of the year recorded positive economic performance, which unfortunately tailed off into a negative third quarter characterised by various challenges. Although the Government has announced various policy measures that are meant to stabilise the economy, it has not responded well to these measures and key challenges remain around containment and reduction of the fiscal deficit, resolution of the fuel crisis which has crippled economic activity, resolving remuneration issues after incomes were eroded by the spike in inflation and the dislocation in the exchange rate environment, and attracting meaningful foreign direct investments,” said Mr Sebborn.
He said economic growth prospects for 2019 remain weak as the current challenges described above are showing no sign of being contained in the near future. The situation is further exacerbated by the erratic rains during the 2018/19 agricultural season.
Stanbic Bank continues to maintain high standards of corporate governance, ensuring that its conduct is above reproach. It complies with regulatory and corporate governance requirements and is committed to advancing the principles and practice of sustainable development and adherence to the laws of the country.
Mr Tapambgwa paid tribute to the Bank’s staff members, saying he remained indebted to the team for its untiring support and contributions in a tough operating environment as the Bank strives to meet its clients’ evolving demands.
“Customer centricity is one of our key pillars as a service provider because they are the reason for our existence. We continue to drive a customer-centric culture in our innovations, leading to the development of user friendly and convenient technologies for our valued customers,” he said.
The institution’s banking applications, Online and Mobile Banking platforms are under continuous improvement to give the customer more control of their finances. Above all, more security measures continue to be put in place to protect customers from criminal activities such as card fraud, through security authentication features that allow customers to deactivate their debit cards and report any suspicious activity immediately. “Empowering our customers is indeed an important factor in our operations and we remain compliant with regulators as we serve our customers through our various operations” he said.