STANBIC Bank Zimbabwe (Stanbic) says its profit declined by $100 million to $1,2 billion during the half-year to June 30, 2021, due to the impact of the Covid-19 pandemic.
Stanbic’s board chairman, Gregory Sebborn, said the bank’s operating expenses increased from $2,7 billion to $3,2 billion during the period, driven by expenditure of $430 million incurred in a staff optimisation exercise.
“Inflation adjusted profit after tax of $1,2 billion was slightly below the inflation adjusted profit of $1,3 billion achieved in the comparative period, largely because of the depressed performance of the trading revenue line on account of the subdued trading activity, which was experienced during the period given the foreign currency shortages in the market combined with periods of lockdowns,” Sebborn said last week in a statement accompanying results.
Stanbic recorded a 218 percent growth in its net interest income, closing the period at $2,6 billion, outstripping prior period income of $803 million. This was attributed to strong growth in interest earning assets during the period as new lending assets were written.
Fee and commission income for the period grew by 167 percent from $1 billion in 2020 to $2,7 billion, largely spurred by improved volumes of transactions which were processed after the two months lockdown period.
Sebborn cautioned that despite the performance by the bank the country’s national economy still faced significant headwinds.
“Notwithstanding the notable improvements above, the economy continues to be impacted by the resurgence in Covid-19 cases, low business confidence, policy inconsistencies, high inflation, foreign currency shortages, low disposable incomes and unstable energy supply.
“The policy environment and fiscal space are likely to remain constrained to contain these challenges in the short to medium term outlook,” he said.
The country’s economic performance is however expected to improve. Both the International Monetary Fund (IMF) and World Bank have reviewed the Gross Domestic Product (GDP) growth forecast for Zimbabwe to six and 3,9 percent respectively. This was after initially forecasting marginal growth of around three percent. The government has projected a 7,8 percent growth.