HARARE – Econet Wireless Zimbabwe subsidiary Steward Bank (Steward) has made its first profit since the telecommunications giant acquired the financial services provider in 2012.
Steward said it made a profit after tax of $5,4 million in the full year to February 2016 compared to a loss of $8,3 million over the same period last year.
In the period under review, the bank’s revenue recorded a strong rally increasing 23 percent while costs were reduced by 38 percent compared to the same period last year.
“…For the first time since our birth as Steward…, the bank has reported a full year profit before tax of $6,2 million…Our strategy has resulted in a smaller but more efficient balance sheet evidenced by our strong financial ratios in comparison with our peers,” the bank’s chairman Oluwatomisin Fashina said.
At $7,7 million, net interest income grew from $6 million recorded prior comparable period as non-interest income also increased to $18,8 million from $16,9 million.
Fashina said the bank had a core capital base of $38,6 million by end of February which was well above the Reserve Bank of Zimbabwe minimum capital requirements of $25 million.
He added that the bank’s liquidity ratio at 72 percent, was also well above the regulatory requirement of 30 percent.
“Our loan to deposit ratio averaged 58 percent reflecting our cautious approach to lending,” he said.
Steward — formally known as TN Bank — made significant progress in the period under review and cleaned up its non-performing loans from 35 percent to 13,5 percent, while the financial institution’s cost to income ratio stood at 76 percent.
In the year under review, total assets stood at $168,6 million up from $164,6 million as total liabilities came down to $99,8 million from $101,2 million prior year.
The bank’s chairman said Steward had a compelling strategy to transform the country’s banking sector through its innovative and entrepreneurial culture aimed at addressing customers’ needs.
In the year under review, transactional banking also registered growth on the back of the bank’s universal banking platform.
“As a consequence, Steward has become the second largest acquirer of Zimswitch transactions in the country,” Fashina said, adding the group had positioned all its product offerings to respond to economic headwinds.
This comes as Steward realised a profit after tax of $1,9 million in the half year to August 2015 compared to a prior year loss of $3,7 million over the same period and a $22 million loss in the 2013 comparable period.
Despite making a healthy profit, the bank did not declare a dividend for the full year.