Harare – Zimbabwe’s fragile economic environment which has been characterised by increasing default risk has had a negative impact on lending, said Stanbic Bank.
In a results statement released on Wednesday Stanbic Bank, which is owned by South Africa’s Standard Bank [JSE:SBK], said it has not been able to match growth in deposits with asset creation in the light of the increasing fragile economy.
“The bank’s loan to deposit ratio deteriorated from 57% in December 2015 to 44% largely because of the unforeseen growth in our customer deposit base from $474m to $625m which could not be matched with asset creation,” said Stanbic.
The bank’s lending portfolio was almost flat, having increased slightly to $273m from $272m in December 2015 as it continued to drive the growth of a quality loan book.
The bank also experienced a 12% decline in its fee and commission income from $17.8m in June 2015 to $15.6m.
“This is a reflection of the downside impact of the current market wide cash and nostro (foreign exchange) shortages which saw a decline in transaction volumes passing through our delivery channels,” said Stanbic.
It added that the recent monetary policy measures, which included among others the introduction of surrender requirements on mineral and tobacco exports, compounded by the directive for banks to cut bank charges also had a negative impact on its earnings.
Stanbic however remained profitable, recording a profit of $10.5m which was level with the prior period’s performance.