Steward Bank consolidates profitability

Operating expenses increased by 6 percent owing to the growth which was witnessed in the period, but the cost to income ratio improved to 64 percent in the period, relative to 73 percent recorded in the comparable period last year, reflecting the improvements in operational efficiency.

Key metrics remained solid, with the bank reporting a core capital base of $37.6 million as at 31 August 2016, a sign of strong capital position.

Additionally, the bank’s liquidity position improved by 17 percent to close at 77 percent over the previous six months, more than double the minimum regulatory requirement by the central bank of 30 percent.

The financial institution remained conservative in issuing new loans and as such, net interest income declined by 20 percent to $3.6 million, while interest bearing assets decreased by 8 percent to $94 million as at 31 August 2016 relative to $102 million in the comparable period last year. Steward Bank’s loan to deposit ratio fell to 51 percent as at 31 August 2016 from 67 percent in the comparable period last year.

Additionally, allowances for credit losses charge increased to $1.009 million in the period from $0.769 million as at 31 August 2015, attributable to an estimation of potential losses that the bank might experience due to default risk in an environment where credit risk is high das the economy continues to struggle.

Steward Bank, formerly TN Bank before Econet Wireless Zimbabwe Limited acquired a 100 percent shareholding in January 2013, was struggling until the shareholder change. The bank turned the corner in the financial year ended February 2015 and, has tailored a model that appears suited to Zimbabwe’s current liquidity crisis.- The Source

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