STANBIC Bank Zimbabwe reported a 42% increase in after-tax profit to US$39,15 million in the year to December 2018, but the bank has warned that growth prospects for 2019 remain weak.

In a statement accompanying the company’s results, chairman Gregory Sebborn stressed that the bank had not been spared from the myriad of macro-economic challenges affecting Zimbabwe’s economy.

A pressing foreign currency shortage and resurgent inflationary pressures have dampened any growth prospects for the southern African economy.

“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,” Sebborn said.

- Advertisement -

The growth in profit after tax was driven by growth in the net interest income and non-interest income of 26,44% to US$69,65 million and 25,74% to US$67,73 million, respectively. In 2017, the net interest income was US$55,08 million, while non-interest income ended the year at US$53,86 million.

The bank’s loan book grew by 17% from US$330,4 million in 2017 to US$387 million, reinforced mainly by new lending assets which were created in the period, combined with an improvement in facility utilisation by some borrowing clients.

Chief executive Joshua Tapambgwa said the bank had increased its deposit base from US$1,2 billion as at the end of 2017 to US$1,5 billion because of the worsening foreign currency shortages.

“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,” Tapambgwa said.

Overall cash and cash equivalents grew by 27,8% to US$932,55 million for the period under review from a 2017 comparative of US$729,66 million.

The bank increased its holding of notes and coins by 85,95% to US$11,49 million, balances with the central bank by 15,4% to US$698,12 million and balances with other banks by nearly 90% to US$224,59 million.

Total operating expenses grew by 11% from US$64.1 million in the prior period to US$71,3 million.

Total assets increased by 26% to US$1,76 billion in the period under review, driven by the growth of cash and cash equivalents, loans and advances as well as financial investments.