The Sunday Mail
Business Reporter —
STEWARD Bank, which is wholly owned by Econet Wireless Zimbabwe (EWZ), says much of its growth can be traced to the roll out of financial services to a previously unbanked market segment and cheap financial products.
The bank’s profit after tax rose 64 percent to US$4,3 million in the six-month period to August 31, 2016 from US$2,6 million in the same period a year ago.
Much of the bank’s growth has been driven by a banking model that is anchored on low-cost banking services. Steward Bank chief executive officer Dr Lance Mambondiani told The Sunday Mail Business that it is unsurprising that the financial institution has added more than 120 000 customers in the six-month period.
“The bank’s decision to position itself as a cheaper alternative to its peers, offering an iSave Account, connected to Ecocash with no monthly service charges appear to have paid dividends, resulting in the increase in new customers.
“New customers appear to have embraced the bank’s drive to reduce the cost of banking, whilst providing customers with several electronic options to pay for goods and services and avoiding the cash crisis.
“The bank realised a 44 percent growth in Non-Funded Income (NFI) as a result of the increased customer transactions and a proportional increase in the number of customers using its channels such as POS machines and agent banking platforms which it pioneered in 2015,” said Dr Mambondiani.
In May, Steward Bank was voted the Best New Retail Bank by the Global Banking and Finance Review in Tower Hill, London. It was also voted the Zimbabwe Investment Authority (ZIA) Best Bank Award, Most Innovative Digital Banking Product of the Year and Top Leadership Excellence Bank of the Year Award.
Steward Bank now has more than 3 000 banking agents. However, the bank’s chairman, Mr Bernard Chidzero (Jnr), noted in a statement accompanying the interim financials that the financial institution has cut back on lending.
“The adverse macro-economic conditions require us to be cautious in our assessment of our client’s ability to repay advances.
“Under the prevailing economic circumstance, as a responsible lender, the bank has remained conservative in issuing new loans,” said Mr Chidzero.
Consequently, Steward Bank’s net interest income declined 20 percent to US$3,6 million, while its interest bearing assets reduced by 8 percent to US$94 million as at August 31, 2016 from US$102 million during the same period.
The bank’s liquidity position improved by 17 percent to 77 percent over the reporting period.
