REVIEWED ABRIDGED FINANCIAL STATEMENTS for the Six Months Ended 31 August 2018 STEWARD BANK LIMITED 1795/ PAGE 1 LIMITED 1795/ PAGE BANK STEWARD
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REVIEWED ABRIDGED FINANCIAL STATEMENTS for the six months ended 31 August 2018 STEWARD BANK LIMITED 1795/ PAGE 1 LIMITED 1795/ PAGE BANK STEWARD HIGHLIGHTS US$8,5m PAT US$9.3m H COST TO 103 US$4.8m Net Operating 82 INCOME 123 2 RATIO Tier 1 Capital Growth from Prior year NNINTEREST IIIT Income US$75.5m Strong growth in net interest INCOME RATI 2018 2017 inome, as well as More than double the transactional-based revenue minimum regulatory 2 US$19m in line with strategi intent 3 H NET INTEREST INCOME ratio of 30% CHAIRMAN’S STATEMENT position as a net importer of goods and services. Inflation rose to grew by 14 percentage points from 68% in prior year to 82% in the the top five banks in the Country. We are truly blessed to have an 4.29% in July 2018, up from 2.91% reported in June 2018. Access to period under review. Following a clean-up of our loan portfolio in energetic team of talented and motivated individuals who represent Introduction cash remained a challenge although this has resulted in a significant the past few years, the Bank managed to reduce the Non-Performing the organisation with passion and professionalism on a daily basis. For the six months ended 31 August 2018, Steward Bank delivered increase in electronic transactions which are now estimated to Loans (NPL) ratio to 5% in the period under review, from 12% reported another strong financial performance recording double digit growth account for 96% of the total transactions in the country. Interest rates in the same period last year. This is one of the lowest NPL ratios in the To all our customers; thank you for your support and for believing in under an extremely challenging environment. The Bank reported a remained suppressed due to the high liquidity in the market and industry. our vision to serve you differently. “We are who we are because of Profit Before Tax of $27.1 million, which is 139% higher than the $11.3 lending rates have remained static between 3% and 9.75%. you”. million registered in the comparative period last year. This continuous Social Impact – Changing Lives growth trajectory consolidates our rapid transformation in the past Despite these constraints, we have always believed that in these In the period under review, the Bank made a strategic shift to increase Dividend years as a lean, agile and efficient digital bank offering affordable, challenges lie some of our greatest opportunities. The strength of our intermediation and lending activities in previously underserviced The Board has declared an interim dividend of US$2 million for the convenient and relevant banking solutions to every Zimbabwean, innovative spirit has helped us deliver relevant solutions to the day-to- areas such as housing, energy, healthcare, rural finance and SME six months ended 31 August 2018, after taking into account the including those previously excluded from access to financial services. day problems experienced by our customers. We remain confident in support. The Bank is currently offering mortgages to Zimbabweans at performance of the Bank and the need to strengthen the Bank`s our strategy and our ability to deliver value to the shareholder, whilst home and abroad who wish to participate in the property market by capital position. Steward Bank, now fully integrated as a part of Cassava SmartTech, has exploring new growth opportunities even in uncertain economic buying or building new homes, or improving their existing homes. The remained focused on building a digital bank of the future premised times. Bank has also developed its own housing units in the Ruwa Fairview Bernard T.R. Chidzero on an open, scalable and cost effective banking model capable of area for our non-resident customers who prefer to buy completed Board Chairman serving every Zimbabwean who needs a Sustainable Growth Strategy in a Challenging EnvironmentPAT units. This first-of-a-kind scheme bundles mortgages with other T N banking service. In the six months under DuringS the E period under review the Bank recorded a substantial growth Econet Group services such as a complete solar system by Distributed 29 October 2018 M A C review, we are pleased to have welcomed in netH operating income compared to Power Africa (DPA), entertainment installation through Kwesé and S the same period last year. NetPAT operating internet capabilities through our partners, ZOL. A an additional 170 000 new customers S E T N to the “Purple Family”, taking the total A income for the Half Year ending August CORPORATE GOVERNANCE STATEMENT MA A C number of customers using our platform 2018 grewH by 103% to $53.6 million, As part of our strategy to become a “Green Bank”, Steward Bank has A A S A to over 740 000. The trust bestowed on A up from $26.4 million registered in the also taken a giant step in addressing Zimbabwe’s power challenges. The Board of Directors us by our new and existing customersA is a A same period last year. Our Total Assets Together with DPA, the Bank has made a significant investment in The role of the Board includes, inter alia, the approval and adoption A privilege we do notA take for granted. We and Cash and Cash equivalents grew92% by funding and installing solar energy solutions for corporates who of the strategic and annual business plans, setting of objectives, are committed to serving each and every 76% and 226%, respectively fromrowth prior rom currently depend on the sometimes unreliable power grid solutions. review of key risk and performance areas, review of management’s A rior ear one of our customers through relevant year largely driven by a 95% increase Renewable energy is not only important in addressing climate change performance against set criteria and objectives and determining in customer deposits. Our Non-interest92% but crucial in relieving the foreign currency burden incurred in and innovative products and services that 22, rowth rom the overall policies and processes to ensure the integrity of the address their varied financial needs within income grew to $41.7 million, up fromrior earimporting power. institution’s risk and internal control management. the communities in which we serve. $24.2 million, a 72% uplift from the 8,0 H 019 As part of its competitive advantage, 22, comparable period last year. This is The Bank has also launched a $100 million fund aimed at resuscitating The Board regularly reviews its structures and policies to ensure the Bank will continue to leverage on attributed to the substantial increase the Country’s ailing Healthcare sector, providing funding to healthcare continued adherence to the governing instruments and international synergies from Cassava SmartTech entities such as EcoCash, EcoSure, in the number of customersH 019using practitioners who wish to retool and invest PAT 8,0 S E best practice. EcoFarmer, EduTech, HealthTech and Vaya, our ride hailing service. our digital Tplatforms N and the growing in the latest health-tech capabilities. C M A strength of our transactional banking model. H The Board of Directors is committed to upholding the highest standards S The Bank partnered with SNV International Operating Environment – Challenging the Headwinds A A of corporate governance by ensuring that business is conducted in a Gross interest earning assets grew by 23% from prior year due to an to participate in a Food and Agriculture Zimbabwe’s operating environment has been characterised by A transparent, responsible and accountable manner as enshrined in the increase in government instruments and the Bank’s current strategy Organisation (FAO) Rural Finance Project turbulence and unpredictability in the past few years. The economy A A international and local corporate governance frameworks. Steward to increase lending in strategic areas. The prudential liquidity ratio to provide affordable financial services faces liquidity and foreign currency constraints owing to the country’s Bank has adopted and continues to work towards compliance with to ruralA households, improve agricultural the National Corporate Governance Code for Zimbabwe. The Board productivity, increase incomes, improve food 92% Charter is also available torowth directors rom for reference regarding their duties security and nutrition, and reduce poverty in rior ear rural Zimbabwe. With the ongoing liquidity and obligations. Directors are free to take independent professional advice at the Bank’s expense in furtherance of their duties. challenges, 100,000 rural customers22, signed up for our low cost iSave accounts. Of these 2 Board and peer evaluations are conducted annually. customers, 60,000 8,0were registered for our H 019 “Kambudzi” mobile banking service, whilst 30,000 were registered for EcoSure mobile insurance. As at 31 August 2018, the Main Board held two (2) meetings to assess risk, review performance and provide guidance to management. Innovation – The Only Constant 1 One of our core values is Innovation. We remain committed to Directorate customer-driven innovation and co-creation to continuously improve Mr. Jonah Mungoshi resigned as a non-Executive Director of the Bank our product and service delivery as well as offering solutions that effective 30th of April 2018 after serving for over eight (8) years. are tailored to the day-to-day challenges facing our clients. We are The Board acknowledges his immense contribution and extends its enormously proud to be the market leader in delivering ground appreciation for the service rendered. breaking innovations that change people’s lives. As at 31 August 2018, the Bank’s Board comprised eight (8) non- In the last six months, we introduced one of our signature products, Executive directors and two (2) Executive directors. The majority of “Kwenga”, a payment solution that allows small businesses such as the Board members are independent non-Executive Directors.