- Net interest income was higher at ZW501 million
- Loans scaled up by 84%
- Total assets increased to ZW18,9bn
- Core fees surged to 90%
- The Bank recently concluded the signing of a US$11m housing deal with Shelter Afrique
Harare – Financial services provider, BancABC has posted a commendable set of results for the half-year ended 30 June 2021 (HY’FY21), overturning prior year losses which coincided with the general economic slowdown induced by the negative impact of COVID-19 on business and economic activities.
For the six months to June 30, 2021, the Bank posted an inflation-adjusted profit after tax of ZW$471 million from a loss position of ZW$174 million recorded in the same period last year driven by the optimisation of the bank’s balance sheet non-interest income.
Net interest income for the period increased by 39% to ZW$501 million from a comparative 2020 same period of ZW$361 million.
However, the Bank’s total operating income decreased by 14% to ZW$2,7 billion owing to negative inflation-adjusted returns on investment property.
Total assets for the period under review increased by 11% to ZW$18,9 billion buoyed by a 17% increase in customer deposits.
According to the Bank, deposits growth funded new disbursements to increase loans by 84% to ZW$2,6 billion from ZW$1,4 billion in the comparable period last year.
“The growth in the loan book was achieved whilst maintaining strict underwriting standards leading to an overall improvement in the non-performing loans ratio to 0.94%, a 30% decrease from the December 2020 position of 1.5%,” the Bank said in a statement accompanying the financials.
Commenting on the performance, Chief Executive Officer, Dr Lance Mambondiani, said despite the overall increase in loans, the credit impairment charge for the period under review was 52% lower at ZW35 million from ZW74 million in the prior year.
While total operating expenses increased by 21%, the Jaws effect was positive with core income growth exceeding costs growth by 16% during the period under review.
Core fees surged to 90% during the period to ZW315 million compared to the same period last year propelled by the bank’s customer acquisition strategy and investment in digital channels.
Dr Mambondiani added that higher than expected volumes through the in-store partnership with TM Pick N Pay has also contributed to the strong core performance.
Meanwhile, liquidity and capital adequacy ratios surged to 97% and 41% respectively after scaling up above the regulatory minimum of 30% and 12%, while core capital was the equivalent of US$41 million dollars compared to the regulatory year-end requirement of US$30 million.
During the period under review, the Bank concluded the signing of an US$11 million housing development deal with Shelter Afrique.
“The line of credit will allow us to contribute to the addition of a new stock of low-cost housing to address the country’s housing challenge” and the Bank added that “The bank will work with several stakeholders on this project including the Ministry of Housing and Social Amenities which is expected to be a major beneficiary of low-cost houses across a number of towns countrywide.”
Despite the effect of the COVID-19 pandemic, the Bank managed to expand its kiosk network in TM Pick N Pay shops across the country while the bank also closed three branches and replaced them with 39 Bank and Shop kiosks across Zimbabwe.
“Our goal is to be in 48 TM PnP stores by year-end as we increase our customer reach,” Mambondiani.
As a going concern, the Bank is poised to deliver value to its stakeholders with the projects that it plans to execute, hence, looking forward to a stronger bank performance by year-end.
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