Stanchart profits down 10%

Published: 03 September 2013

Standard Chartered Bank Zimbabwe Limited (StanChart)'s profit after tax slumped 10 percent to $7,2 million in the half year to June 2013, weighed down by a tough operating environment.

The financial institution, wholly owned by British-based Standard Chartered Plc, said non-funded income was depressed during the period under review.

"While the bank recorded four percent growth in lending which translated to an increase in interest income, the overall income was weighed down by a material decrease in non-funded income," said Samuel Rushwaya, StanChart's chairperson.

"This reflected the reduction in charges in line with the MoU signed between Bankers Association of Zimbabwe and Reserve Bank of Zimbabwe earlier in the year," said Rushwaya.

Under the MoU, the financial groups agreed to scrap charges on deposits of $800 and below, and to cap interest rates among other measures.

The bank's non-interest income increased marginally by 2,9 percent to $23 million from $22,6 million in prior comparable period while loans and advances book grew 38 percent to $203 million from last year's figure of $126 million.

Deposits went up 14,5 percent to $329 million.

"The structure of deposits remained mostly short term in nature and this militated against efforts to avail longer-term financing which is an essential ingredient for more sustained industrial recovery.

"The current liquidity constraints continue to be exacerbated by the absence of an active interbank market and lender of last resort," said Rushwaya.

StanChart is one the four foreign owned banks operating in Zimbabwe under pressure to comply with the country's indigenisation policy - compelling foreigners to cede 51 percent shareholding to black locals.

The other three are Barclays, Standard Bank's Stanbic and Nedbank-owned MBCA Bank.

While he was mum on the group's compliance with the empowerment policy, Rushwaya, however, said "the bank's commitment to its local operation was reflected in the increase of operating costs which went up to $23 million in the period under review and lending to key sectors of the economy."

"Despite the challenges, StanChart remains committed to positively contributing to the economy through continued support to key sectors such as agriculture, trade, commodities and SMEs," he said.
- dailynews

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