Ecobank Zimbabwe records profit

Published: 13 March 2014

EcoBank Zimbabwe Limited has recorded a $2,4 million profit before tax for the year ended 31 December 2013, a 220 percent rise from last year`s figure of $0.75million.

The group's financial statement for the period showed that the bank has grown its net operating revenue by 48 percent year on year on the back of fresh capital injection, increased trade finance activities, reduced cost of funds and an increased customer base driven by a wider network of branches and ATMs.

The bank continues to pursue growth strategy buttressed by increased investment in human capital and distribution channels.

The bank, however, recorded a 35 percent rise in the operating costs which was attributed to the investment strategy the bank was taking.

Total assets rose by 22 percent to reach $126.94 million. The bank attributes the rise in total assets to the 17 percent increase in deposits through more branches and the fresh capital injection of $8million made in June 2013.

"In a market characterized by major liquidity challenges, the bank strategically focused on off balance sheet fee financing structures as opposed to on balance sheet lending.

In our sit of this strategy the bank benefited from credit lines worth $50.5 million made available by the EcoBank group and $4.7 million from third party foreign banks used largely to finance letters of credit and guarantee transactions in addition to being the main driver for fee income growth this strategy has resulted in a significant improvement in the proportion of non interest bearing deposits to total deposits from 41 percent to 59 percent.

This translated into a reduction of the bank`s average cost of funds and improved net interest margins," read part of the statement.
- BH24