STANBIC Bank Zimbabwe emerged the overall best-performing bank at the Zimbabwe Independent (ZimInd) Banks & Banking Survey awards ceremony held in Harare yesterday. Sponsored by First Capital Bank, the event recognised outstanding performance in Zimbabwe's banking sector for 2024.
The Banker of the Year award went to ZB Bank chief executive officer Elisha Chibvuri for his exceptional leadership in steering the institution through a complex financial landscape.
Stanbic Bank secured the top accolade due to its robust digital transformation, cost management, efficient lending practices, and strong brand positioning.
The bank excelled in critical performance metrics, including profitability, operational efficiency, cash flow management, and shareholder value creation.
A significant boost in its average lending book, driven by demand for foreign currency funding, further solidified its dominance.
Stanbic also commanded a considerable share of foreign currency-denominated transactions, reinforcing its competitive edge.
FBC Bank claimed the first runner-up position, showcasing resilience in a challenging operating environment.
The bank achieved double-digit growth in total income, with impressive net fee and commission income supported by increased transaction volumes across its digital platforms, a healthy balance sheet, and robust cash resources.
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Other winners included NMB Bank, which received the Digital Innovation Award for advancing its digital banking model, enhancing both customer-facing and back-end processes.
Steward Bank was recognised for its efforts in financial inclusion, particularly in improving access to banking services for under-banked communities.
CABS was runner-up in both categories, while Ecobank received recognition for its contribution to financial inclusion.
The People's Own Savings Bank won the Environmental, Social, and Governance Award for its focus on sustainability, with CABS taking the runner-up spot in this category.
The National Building Society was named National Building Society of the Year for its impactful contribution to the financial and housing sectors.
This year's research demonstrated that international banks were dominating deposits and offering assets at lower interest rates.
Presenting findings of the survey, Erccro Consulting Plc analyst Farai Muzvondiwa said there was an interest rate differential between local banks and international banks, emanating from the fact that international players picked funds at lower rates.
This created their capacity to deploy funding at lower margins than local banks' rates.
Muzvondiwa said foreign shareholder support had ensured favourable credit terms, thereby creating compelling customer demand and preference.
She said the introduction of the Zimbabwe Gold (ZiG) in April brought relative stability to the economy.
However, it had attendant cost implications around investment in technology, infrastructure, cyber-security, and human resources training for banking institutions.
Muzvondiwa said debate on de-dollarisation had dampened momentum in the mortgages sector.
Banks were limiting long-term assets to hedge against value erosion.
“Thin liquidity both in ZiG and foreign currency, especially for local banks, has been one of the drawbacks for limited interest income within the banking sector,” Muzvondiwa said.
“Widening informalisation in the economy has also exacerbated challenges in the banking sector as it is now the breeding ground for financial disintermediation.
“Creation of liabilities is now a big challenge as most of economic transactions at circa 90% are happening in US dollar and on a cash basis.
“Banks have been profitable over the past years. However, the bulk of these earnings have been non-cash items in the colour of translation gains, revaluation gains and monetary gains.
“Non-interest income contributes 87% of total banking sector income of which, the bulk of that is not real cash flow."
Notwithstanding economic informalisation, Muzvondiwa said dollarisation was also manifesting in the banking sector as both deposits and advances were US dollar-denominated to the tune of 80%.
She said environmental, social, and governance considerations had become a significant focus area for banks due to a combination of regulatory pressures, market dynamics, and the increasing recognition of their role in shaping sustainable economies.
Overall, Muzvondiwa said the banking sector had remained resilient as reflected by adequate capital levels, satisfactory asset quality, stable liquidity and sustained profitability.
In response to the rapidly evolving financial landscape, which has resulted in the growing need for more agile, efficient, and scalable banking solutions, she said banking institutions were adapting by transforming their operations through innovative, cost-effective and customer-centric banking services and products.
