LEADING financial services institution, Stanbic Bank, has posted a historical cost profit of ZWG27,1 million for the six months ended June 30, 2024, amid changes in functional currency.
The historical cost profit was achieved after considering the technical losses of ZWG389 million (ZWG319 million net after tax) incurred on the investment property portfolio.
In a statement accompanying the results, Stanbic Bank chief executive Solomon Nyanhongo said without these losses, the adjusted profit stood at ZWG346 million, representing the true, sustainable performance into the future.
Nyanhongo said following the change in the bank’s functional currency from the Zimdollar as at January 1, 2024, there were technical accounting adjustments that were included in the bank’s income statement and statement of comprehensive income.
“These adjustments arose from differences in fair values of property assets when expressed in the hitherto ZWL$ functional currency compared to the underlying valuations in the open market in real terms,” he said.
Stanbic Bank ended the first half with net interest income of ZWG374 million, which was within expectation supported largely by new foreign currency lending assets which were written during the period as demand for foreign currency facilities remained high, Nyanhongo said.
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Interest income on the local currency facilities was, however, subdued on account of the reduction in minimum lending rates from 130% to 20% following the April 5, 2024, monetary policy statement announcement.
“The bank’s fee and commission income performed within expectation largely spurred by the increased volumes of transactions passing through the various service channels as a result of acquisition of new customers and an increase in wallet share on existing customers,” Nyanhongo said.
The expected credit loss allowances for the period rose to ZWG24,9 million largely driven by the new lending assets which were written in both foreign and local currency as demand for funding remained on an upward trend.
The bank’s credit book remains sound as evidenced by its non-performing loan ratio of 0,67% against the regulatory threshold of 5%.
Operating expenses were contained within expectation as attention was directed at the implementation of various cost containment measures. The cost-to-income ratio ended the period at 51%, against the internal benchmark of 50%.
Stanbic Bank board chairperson, Gregory Sebborn, said the institution ended the period under review with a qualifying core capital of ZWG1,5 billion, surpassing the local currency equivalence of the required US$30 million regulatory minimum core capital.
He said the bank continued to support the growth and development of various industries through its business and commercial banking, as well as its corporate and Investment banking portfolios in alignment with its unwavering commitment to sustainability.
“Our dedication to driving growth within our country remains at the forefront of our operations,” Sebborn said in a statement accompanying the results.