PAN-AFRICAN financial institution Ecobank Zimbabwe Limited came out tops at the prestigious Zimbabwe Independent Banks & Banking Survey that was held at a colourful ceremony in the capital last Thursday. The ceremony, which was held under the theme, The Return of the Zimdollar: Transition to Normalcy?, was organised by Alpha Media Holdings (AMH). The event, held annually, awards banks that have excelled during the period under review.
This comes at a time the banking sector is rocked by liquidity challenges, foreign currency shortages, slow foreign direct investment inflows, high interest rates, adverse economic evolution and serious cash shortages.
People’s Own Savings Bank (POSB), which has shown a consistent growth pattern in earnings over the last four years defying a past of losses and low capitalisation was the first runner-up.
The second-runner up was NMBZ Holdings Limited, which emerged from a volatile past and stood the test of time. Having received shareholder support in recent years, it embarked on an aggressive twin strategy: digitising the bank as well as spurring the loan book. First Capital Bank managing director Sam Matsekete said the banking sector plays a critical role through the provision of financial services in the current turbulent economy.
“As members of the broader financial services industry, we offer pertinent services and have a role to play as the economy travels through this transition. What is required is a financial system that will naturally attract investment locally and internationally,” he said.
“We need to work together to preserve the industry. We can do this through various forms such as effectively playing the role of an intermediary for our customers by providing broad, relevant solutions for them and promoting efforts in the capital market.”
Below are the citations by the Banks & Banking Survey analysts, Equity Axis.
Barely nine years ago, Ecobank Zimbabwe was at the brink of collapse before a reputable international bank came in to breathe a new lease of life into it. Eight-and-half years later after following a restructuring exercise, it is now one of Zimbabwe’s top performing banks. It has carved a niche in trade financing, leveraging on the parent and taking advantage of dwindling correspondence banking to spur its non-funded business.
POSB first runner-up
POSB has shown a consistent growth pattern in earnings over the last four years, defying a past of losses and low capitalisation. At one point it was the only profitable parastatal and this was achieved through an internal reformation of the bank.
Its growth has emanated from quick adoption of ICT and prudence in lending. The bank’s ratios have firmed to healthier levels above the sector’s average. For performing so competitively and ahead of sector heavies and defying the conventional loss-making parastatal path, POSB is this year’s first runner-up
NMB second runner-up
The bank has emerged from a volatile past and it has stood the test of time. Having received shareholder support in recent years, it embarked on an aggressive twin strategy: digitising the bank as well as spurring the loan book. The bank is among the few speeding up innovation in fintech and its results have been showing. Its latest earnings results show a bank that is alaready reaping early gains from digitisation through a very low income-to-operational expenditure (opex) level.
Most Sustainable CSR award – FBC
Sustainability cannot be overemphasised in business in the 21st century and a key component is the social impact of business in communities it operates.
Companies are now encouraged to look beyond profitability and invest in enhancing the lives of ordinary citizens who make their businesses viable through trade. In the first half of the year, the country was engulfed by a dark cloud, Cyclone Idai, which hit the Eastern Highlands. Banks and other corporates rose to the occasion, taking a lead in facilitating rehabilitation of affected communities.
That was indeed commendable. However, FBC went a step further, creating a lasting impression on the affected communities. FBC committed to constructing classroom blocks, one in Chimanimani and the other in Masvingo, and has already initiated moves to begin the construction.
Mobile application of the year – CBZ
Bank income from conventional lines has evolved in recent years. Non-funded income whose main component is fee and commission now dominates income contribution ahead of interest income. This speaks to the impact of ICT in banking, notably in financial technology. It is paramount that banks begin to put more emphasis on this income line to avoid redundancy and loss of market share even as income lines grow. One pertinent aspect of ICT in banking is mobile banking, which is conducted through applications and on the web as well as on mobile networks.
Mobile banking now accounts for 72% of all banking transactions done globally. CBC was recognised for having the most popular application. The winning application has the most downloads online and high security features and is the most frequently updated application among all banks. CBZ’s One Touch is the inaugural winner of the Mobile Application of the year award.
Most innovative bank – Steward Bank
A banking sector survey conducted in the UK shows that there is a high positive correlation between customer service and new customer acquisitions. Trends in banking show that customers are now increasingly demanding high convenience in banking and it is innovation which has come in to close the gap. In Zimbabwe most banks are now focussed on this particularly aspect and are investing significantly in ICT.
However this is still an evident skills gap in the market which implies core banking systems are not adequately exhausted via APIs thus stifling product development. Stewart bank is the inaugural winner of the award. It has amassed the highest number of new clients, increased client engagement through introducing bots (web robots), reduced the time and layers of processes to open an account as well as led the market in development of mobile-based loans and mobile application based on low-cost banking. It now accounts for over 30% of the market share in fee and commission income.
Special Award – Steward Bank
The banking landscape is tilting and so are the income lines. The game in banking is highly tending fee and commission income which is traditionally one of the two dominant income lines in banking. For the first time since 2009, the banking sector generated more income from fee and commission than from funded business. This is in line with global trends and Zimbabwean banks have upped their games.
However, Steward Bank stands out and although its half-year 2020 results are yet to be released indication from full-year results as well as historical performance has shown that it has a very wide margin ahead of peers in terms of its efforts to harness fee and commission-based income. Others are catching up but the bank is a trendsetter.