eBusiness Weekly
Enacy Mapakame
Steward Bank’s profit after tax for the year to February 28, 2019 jumped 42 percent to $31,9 million compared to $22,5 million achieved in the prior year on growth in transactional income.Profit before tax grew 10 percent to $36,2 million from $32,8 million, a growth which management said was reflective of the resilience of the transactional banking model during uncertain times.
Net operating income rose 48 percent driven by strong growth in transactional based revenue in line with strategic intent.
The bank embarked on an aggressive customer acquisition programme that led to an increase in net interest income, which surged 61 percent to $21,5 million.
In line with its five-year strategy to financially include one million, Steward is now at 1,4 million customers which was driven by launch of the *236#, a digital account opening platform on USSD, which helped double the bank’s customer base.
The bank later launched the KaShagi nano loans on the *236# platform to allow access to credit for various capital needs especially for small to medium enterprises (SMEs).
Over $6 million has been disbursed on the platform.
Total income grew 42 percent to $107,5 million with the main contributor being non-interest income which grew 43 percent.
During the period under review, characterised by cash shortages, digital banking channels became the norm, which helped spur growth. The bank became the largest card issuer in Zimbabwe with over 400 000 cards issued.
Chief executive officer Krison Chirairo said over 30 000 point of sale (POS) machines were deployed including 22 000 Kwenga mobile POS machines.
Steward Bank indicated it registered half a million customers onto its mobile platform.
Operating expenses increased due to inflationary pressures during the year. Resultantly, cost to income ratio rose to 61 percent from 49 percent. Staff costs to income ratio of 17 percent was recorded from prior year’s 13 percent.
Loans to deposit ratio declined by 36 percent due to growth in customer deposits that outstripped growth in loans and advances.
Net interest margin retracted marginally to 5 percent as higher yielding mortgage disbursements did not materialise in a market that was largely stagnant.
At 75 percent, prudential liquidity ratio was above the Reserve Bank of Zimbabwe (RBZ) minimum requirement of 30 percent.
Total assets more than doubled to $935 million driven by an increase in demand deposits which grew by 118 percent to close the year at $747 million.
Steward Bank’s tier 1 capital was $92,6 million, above the regulatory minimum $25 million.
The bank will put its focus on the market trends, especially with transition to digital banking platforms and the opportunities that mobile technology is creating.
