Cassava Smartech’s banking subsidiary, Steward Bank, recorded a positive performance in the six months to August 31, 2019, posting a 128,2 percent profit jump to $43,3 million from $19 million reported in the prior year.
The bank’s historical net operating income rose by 121 percent to $118 million from $53,6 million, while profit before tax increased by 22 percent to $33,1 million.
Management attributed the 109 percent increase to $19,4 million in net interest income compared to the previous year to investments and interbank placements.
Gross interest earning assets grew by 28 percent from the prior year and the bank said they were largely driven by the acquisition of government instruments.
In reporting its results for the period under review, the bank took account of IAS 29, which addresses the issue of financial reporting in an inflationary environment.
“The inflation-adjusted net operating income closed the half-year at ZWL$133 million compared to an adjusted prior-year amount of ZWL$132 million. The inflation-adjusted profit before tax for the half-year was ZWL$20,1 million compared to ZWL$51,4 million in the prior year, due to an increase in inflation-adjusted operating expenses,” said the bank.
“There was no material changes to the bank’s inflation-adjusted balance sheet as most assets are monetary in nature.”
The bank said it continues to experience a favorable performance underpinned by the resilience of its transactional banking model, which leverages the digital platforms that it has invested in.
“Our ability to serve the masses and to address their financial needs through our convenient, user-friendly and innovative platforms remains the core competency that has resulted in us delivering a 152 percent growth in non-funded income.
“During the course of the half-year, the number of customer accounts grew exponentially to 1,8 million, with 350 000 more customers being added to the “Purple Family”,” said the bank’s board chairman Mr. Bernard Chidzero in a statement accompanying the group’s financial results.
Mr. Chidzero said the *236# Digital Account Opening Platform, which the bank launched in December 2018, has been instrumental in driving the institution’s mandate towards the financial inclusion of Zimbabweans.
“Since the launch of the platform, the bank has on-boarded more than one million customers through this platform, which has aided the bank in driving its mandate towards financially including every Zimbabwean,” he said.
However, although the bank said it is initiating strategies to safeguard its balance sheet, it noted that the continued devaluation of local currency constantly posed a risk to it.
“During the course of the half-year, the Government gazetted Statutory Instrument 142 resulting in recognition of the RTGS dollar as a legal tender with a starting exchange rate of RTGS2,5 to US$1.
“Consequently, the bank experienced foreign exchange losses of ZWL$21 million,” he said.
Steward Bank closed the period with total assets amounting to $1,7 billion.
Meanwhile, the financial services provider has committed to investing in digital systems to enhance both customer experience and service delivery as it has embarked on a project to upgrade its Core Banking System and Infrastructure which it said will be fully implemented in the third quarter of 2021.
The bank said it remains optimistic as it continues to use artificial intelligence to improve the efficiency and quality of service to customers.
“As we continue to explore the use of this modern technology in our business, we are confident that we will emerge as the front runner in customer experience and service delivery,” added Mr. Chidzero.
Steward Bank received an award of being the most innovative bank in October last year’s edition of the Banks and Banking Survey Awards.