HARARE – Steward Bank reported an inflation-adjusted loss of ZWL903.4 million in the full year to 28 February 2021, 17% wider than a prior-year loss of ZWL773.2 million. Likewise, an inflation-adjusted total comprehensive loss of ZW$940.2 million was recorded in the period, 77% worse off than a total comprehensive loss of ZW$531.7 million a year ago.

The Bank’s expenses increased during the period where it embarked on upgrading its core banking systems which were completed in the first quarter of the current year. Operating expenditures increased in real terms to ZW$4.6 billion compared to ZW$4.1 billion the previous year.

Here are the key highlights of the Bank’s full-year performance:

Net interest income tumbles in real terms. Despite recording growth in historical terms attributed to the increased lending activity and higher interest rates prevailing in the market, the Bank’s net interest income tumbled 17% from ZW$583.9 million a year ago to ZW$486.3 million.

Net operating income slows. The Bank recordeda34% decline in net operating income in real terms to ZW$2.7 billion compared to ZW$4.1 billion a year ago.

“The decline in net operating income was largely tied to the increased cost structure that was tied to system and talent realignment that the Bank made to accommodate the Core Banking System upgrade,” the Bank’s Chief Executive Officer, Courage Mashavave said in a statement accompanying the financials.

He added that the metric is expected to fundamentally improve in the following year owing to the benefits realisation of the Bank’s digital transformation projects.

Non-interest income takes a hit. Despite the Bank embarking on an aggressive campaign to drive customers from its branches and to start transacting on its digital platforms, fees and other non-interest income tumbled by 23% in real terms to settle at ZW$2.5 billion compared to ZW$3.2 million in fiscal 2020.

This goes against the trend in the banking sector where non-funded income has become a huge driver for bank earnings.

Digital banking a necessity. Mashavave said the Bank looks to add more of its branch related services to its mobile platforms as it pursues its aspirations of becoming a fully-fledged digital bank.

“The need to become a digital bank has evolved from becoming an option but to a necessity, as this compliments the new norm of doing business which is largely anchored on digital transformation,” he said.

The outlook for the Bank in the following year will be to extract benefits from the new core banking system upgrade with benefits ranging from Risk mitigation, Compliance, Automation, Innovation and Digital Transformation.

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