Steward Bank posts $26,4 million loss

Published: 08 May 2014

Steward Bank posted a loss of $26,4 million for the year ended February 28, 2014 which it attributed to an on-going restructuring process.

The bank said it incurred non-recurring operating expenditure on-going business model re-alignment process.

The Bank also incurred costs related to its re-branding exercise, closure of marginal bank branches as well as the decommissioning of redundant ICT infrastructure to pave way for new technologies aligned to the new business model.

Operating expenditure for the period stood at $22,4 million. Net interest income in the year just ended stood at $3,8 million, down from $11,2 million in 2013.

Non-interest income was also down to $5 million from $10,4 million in the prior year.

"Net interest income declined in comparison to the previous financial period in light of reduced lending and a reduction of interest rates on outstanding loans.

"This reflects the full impact of the downward pricing revisions and the suspended interest on prudential provisioning. Non-interest income declined in light of reduced account activity and the resultant reclassification of inactive bank accounts," said chairman Oluwatomisin Fashina in a statement.

The bank said it has made strides in meeting the Reserve Bank of Zimbabwe's minimum capital requirements.

As at the ended of the last financial year, Steward's liquidity ratio stood at 29 percent against a minimum regulatory ratio of 30 percent, which was an improvement from the 23 percent reported at the half year mark.

In terms of capitalisation, Steward said it issued a guarantee in favour of AfreximBank for two short term facilities accessed collectively by Econet Wireless (Pvt) Limited and Econet Wireless Zimbabwe Limited totalling $28 million. The facilities expire in December 2014.

"Bound by the provisions of the Banking Act and the attendant Guidelines, the Bank has deducted the contingent liability of $23,3 million associated with the guarantee from its regulatory capital. The Bank had a core capital base of $37 million as at 28 February 2014 which exceeded the Reserve Bank of Zimbabwe’s minimum capital requirements of $25 million," said the chairman.
- BH24