- ZWL depreciated by 59% during the three- months
- The Group recorded a 2% growth in volumes
- Steward Bank’s interest-earning assets portfolio grew by 3%
Harare- ZSE-listed diversified technology group, Ecocash Holdings Limited says it succumbed to huge exchange losses during the first quarter ended 31 May 2022 as the local currency continues to rapidly depreciate against the greenback.
Since the beginning of the year, the local currency has depreciated by 73% against the United States dollar on the RBZ-governed auction market while deficits have more than doubled on the parallel market.
During the Group’s reporting period between March 2022 to May 2022, the Zimbabwe dollar regressed by 59% despite controversial policies that have been passed by RBZ and Treasury to bolster the ailing local currency.
“During the period under review, significant exchange losses were recorded due to the weakening exchange rate with the local currency depreciating by 172%,” the Group said in a statement accompanying the trading update.
The Zimbabwe dollar is currently suffering a huge setback mainly due to fiscal indiscipline which has flooded the market with broad money upsetting the balance between money supply and economic growth.
Treasury and RBZ have failed dismally to manage the ballooning exchange rates, inflationary pressures and scarcity of foreign currency, situations that have laid a death bed for the Zimbabwe dollar.
However, despite the irregularities, the Group witnessed a modest increase of 2% in volumes compared to the previous quarter driven by the FinTech business segment which remains the highest contributor to revenues as management continued to adapt business units’ operating models to both grow and diversify sources of revenue.
The mobile money business registered a 3% growth in transaction volumes when compared to the prior quarter due to an increase in customer activity with a growth of 38% witnessed on wallet funding as customers continue to prefer mobile transactions over other payment platforms.
“The mobile money business is expected to continuously improve its performance going forward driven by new innovations, product bundling within the Group and promotions to drive mobile payments,” said the Group.
During the quarter under review, EcoCash (Private) Limited launched its Domestic Money Transfer, a convenient option for sending and receiving US dollars across the country with its impact expected in subsequent period as the market adopts the product.
Meanwhile, Steward Bank’s interest-earning assets portfolio grew by 3% from the last quarter on the back of an increase in underlying business and customer deposits.
“In the first quarter, the Bank launched the Foreign Currency Account (FCA) on Square, an innovation that digitizes all FCA related transactions on Mobile App, allowing customers to transact through their phones.”
“The Bank also revamped its *236# platform by adding new features to enhance customer experience and ensure a seamless customer journey.”
Life business which started offering USD-denominated products in the period under review to register a steady growth of 3% broadened its service offering on the *900# platform in response to customer feedback and as part of our promise to enhance the bouquet of packages that Ecosure offers.
The Group said its number of add-ons options to the core product on the *900# platform increased to ten and the add-ons are being managed within the approved risk appetite limits.
Vaya technologies’ growth continued to be anchored on the HealthTech business as demand for health services continued to be high while the HealthTech products were also bundled with other group products as part of the growth strategy.
“Over 100,000 customers have been onboarded onto the MARS-EcoCash capitation model,” the Group added.
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