ECOBANK Zimbabwe posted a profit after tax of US$1,2 million in the half-year to June 30, up 2370% in the comparative period last year.
Non-interest income was US$4,3 million, a figure representing a growth of 38%, while interest income grew 116% at US$4,6 million in the same period last year.
Net revenues grew 58% to US$7,9 million. The bank’s total assets swelled to US$120,2 million, a figure the bank attributed to a myriad of factors, including “increased interest income driven by improved risk asset selection, a growing customer deposit base and enhanced credit lines, mobilised from the Ecobank Group”.
The bank said another factor in the bank’s growth from this time last year has been the increase in its customer base due to service diversification and a wider network of branches.
Ecobank Zimbabwe has opened new branches in Mutare, Kwekwe, Chiredzi and Chitungwiza in the first six months of this year bringing its total number of branches to 11.
“This has impacted positively on fees and commissions earnings from transactional banking,” the company said in a statement attached to its financial results.
To reflect the bank’s growing loan book, which stood at US$80,4 million, higher allowances for loan impairments were made while a cautious increase in non-performing loans coverage ratio, which stood at 88% at the end of the six month period was undertaken.
In order to strengthen the company’s balance sheet, shareholders infused an extra US$8 million into the bank, bringing the total shareholder contribution to US$ 42,8 million since the bank’s launch in 2011.
Ecobank Zimbabwe has deepened its investment in automation and technological advancements which has not only upgraded services but has also brought cost-efficient operating solutions to help quell a previously high cost-to-income ratio (CIR).
The bank’s CIR stood at 94% in June of last year and has seen a marked improvement to 76% in June of this year.
“Although operating costs were expected to continue on an upward trend in line with the organic business growth initiatives, a decline in the rate of growth of costs is expected due to a strong focus on cost control and enhanced efficiencies,” the bank said.
Ecobank plans to continue with its expansion project into the second half of the year increasing its distribution network through new branches, ATM’s as well as merchant Point of Sale devices and mobile banking.
“Upon completion of the branch expansion programme greater emphasis will be placed on deriving operational and cost efficiencies from the increased scale to enhance the profitability of each channel.”