• A360 mobile App recorded 64% growth in active users and a 51% increase in volumes
• The bank’s social banking platform, Ally realised a 543% growth in income and 47% growth in volume
• Internet banking contributed 50% of total digital payment values

Harare- Financial services provider, BancABC is pursuing a branchless approach to become a top services provider after revealing plans to replace most of its manual services with digitalisation. 

The development comes amid a robust income performance by the Group, anchored by lending, deposits and non-interest income during the year. 

During the period, there was an exodus of customers to digital platforms resulting in the A360 mobile App to record a 64% growth in active users and a 51% increase in volume thus, contributing 533% growth in revenue.

The bank’s social banking platform, Ally realised a 543% growth in income and 47% growth in volume with ZIPIT being a popular transaction set on the platform. In addition, Ally also played a pivotal role in aiding the growth of the City Hopper platform, a domestic remittance product where the bulk of the transactions has been initiated.

Internet banking contributed 50% of total digital payment values as it was preferred by Smaller to Medium Enterprises (SMEs) and corporates, resulting in a 461% growth in revenue compared to the same period the prior year.

 During the period under review, the bank also deployed an online loan application solution to allow customers to submit loan applications through the BancABC Website. 

“The Payments and Innovation teams have focused our innovations to improve our digital products and services and provide simplified and convenient payment capabilities to all our customers,” the bank’s chief executive officer, Lance Mambondiyani said in a statement accompanying the half-year financials. 

The bank’s microfinance unit, BancEasy launched digital civil servant loans on its*243 USSD platform improving access to loans for civil servants across the nation. 

“We anticipate the rapid growth of digital loans as product awareness grows,” Mambondiyani said. 

 City Hopper experienced exponential growth in both the volume and value of transactions. The service which is conveniently accessible in 41 TM Pick n Pay stores and all BancABC branches remains a cornerstone of the universal banking approach.

In November 2021, in partnership with Mama Money and TM Pick n Pay the bank launched Border Hopper, a cross-border remittance service, with the first corridor being South Africa and Zimbabwe which allowed to extend remittance services to the Zimbabwean population residing in South Africa. 

The Bank rolled out a suite of Mastercard branded cards, becoming the first bank in the country to implement solutions under the Zimswitch and Mastercard Partner Business arrangement that seeks to make access to financial products more affordable and accessible to the general citizenry.

“This partnership has yielded multiple benefits to the Bank including EMV Compliance, increased scope for financial inclusion as well as global payments capabilities for our clients.”

“The rollout of Mastercard branded cards paves way for the discontinuation of the magstripe cards before the end of 2022,” Mambondiyani added. 

Meanwhile, the Bank integrated the ZEEPay solution to support Bulk payments. ZEEPAY is a secure, cost-effective and efficient solution that facilitates electronic funds transfers (bulk or single) across the Zimswitch Automated Clearing House (ACH) using the ISO20022 standard.

The solution is expected to improve efficiency and customer experience for customers receiving their salaries and corporate payments through the Bank.

Further improving the customer experience, The A-team rolled out its internally developed Query Management System (QMS) to help improve customer experience. The QMS enables accurate assignment, logging and tracking of customer query to improve query resolution. During the year, the queries raised by the customers have been logged across all touchpoints and regularly monitored and followed up for resolutions. 

The Group expects the triple T strategy as a going: Top Performing, Tech First and Top of Mind. The strategic thrust for 2022, remain guided by our three key strategy pillars; to become a top-performing financial institution, that drives revenue and delivers a superior customer experience whilst balancing risk.

 “Our ongoing investments in IT hardware are intended to aid the stability of our platforms, accelerate digital reach, customer onboarding and automate numerous manual processes and to achieve a top five market share across our business units, a concerted effort is being directed towards mining the various ecosystems in which we play and achieving critical mass to provide value to all the stakeholders within our ecosystem.”

 Financial performance 

The Group’s profit accelerated by 14% to US$1.5 billion, up 14% over the same period in the prior year driven by sustained growth across all the operating divisions. Significant contributors to this uplift were foreign exchange gains, increases in fees and commissions and lending revenues.

 Net interest income for the period almost doubled after rocketing by 91% to US$$2.8 billion against US$1.5 billion in the comparable period in the prior year. The growth was largely due to credit support to customers in need of working capital finance and funding for capital projects. The Group achieved this while maintaining asset quality at the target levels with a non-performing loan ratio of 2%. The cost-to-income ratio in inflation-adjusted and historical terms was 45% and 30% respectively reflecting the strong increase in our revenues and efforts to contain expenses against the ravaging effects of inflation and the weakening exchange rate. 

Total assets ended the period at US$57 billion while total loans were up 11% comprising both local currency and foreign loans. The Bank stepped up lending in both currencies as more businesses increased their proportion of foreign currency revenues and the general on-demand deposits also showed improved stability. 

The Bank’s capital adequacy ratio remained above the 12% minimum at 32% reflecting the capacity to take on more risk-weighted assets. The USD equivalent core capital, compliant as of 31 December 2021 however reduced to US$27.7m driven by the rapid depreciation in the exchange rate during Q2 2022. 

“The Bank’s focus over the next six months is the preservation of the capital position and sustainable organic growth to protect shareholder value against market instability.”

“Challenging Economic Environment Outlook Deterioration in the economic outlook is of major concern as this amplifies the risks of runaway costs and imposes a huge constraint on revenue generation, resulting in a significant margin squeeze.”

However, the Group said volatility within the exchange rate environment imposes an onerous challenge for banks to meet the US$30m minimum capital requirement. As the economy continues to dollarise and informalise, the Bank must be flexible and quickly adapt to changing needs of the customers away from the traditional banking model. Historically, the Bank has been strong in the wholesale banking space where it has structured significant deals that are of national importance and contribute to economic development.

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