Leading financial services institution, Stanbic Bank, has posted a historical cost profit of ZWG27.1 million for the six months ended 30 June 2024 amid changes in functional currency from ZWL.

The historical cost profit of ZWG27.1 million was achieved after taking into account the technical losses of ZWG389 million (ZWG319 million net after tax) incurred on the investment property portfolio.

In a statement accompanying the results, Stanbic Bank Chief Executive Solomon Nyanhongo said without these losses, the adjusted profit (commonly referred to as "headline earnings") is ZWG346 million, and this represents the true, sustainable performance into the future.

Nyanhongo said following the change in the Bank's functional currency from the Zimbabwe dollar ("ZWL") as at 1 January 2024, there were technical accounting adjustments that were included in the Bank's Income Statement and Statement of Comprehensive Income.

"These adjustments arose from differences in fair values of property assets when expressed in the hitherto ZWL functional currency compared to the underlying valuations in the open market in real terms," said Nyanhongo.

He said Stanbic Bank ended the first half of the year with net interest income of ZWG374 million which was within expectation supported largely by new foreign currency lending assets which were written during the period as demand for foreign currency facilities remained high.

Nyanhongo said interest income on the local currency facilities was, however, subdued on account of the reduction in minimum lending rates from 130% to 20% following the 5 April 2024 monetary policy statement announcement.

"The Bank's fee and commission income performed within expectation largely spurred by the increased volumes of transactions passing through the various service channels as a result of acquisition of new customers and an increase in wallet share on existing customers," said Nyanhongo.

The expected credit loss allowances for the period rose to ZWG24.9 million largely driven by the new lending assets which were written in both foreign and local currency as demand for funding remained on an upward trend. The Bank's credit book remains sound as evidenced by its NPL ratio of 0.67% against the regulatory threshold of 5%.

Stanbic Bank's operating expenses were contained within expectation as attention was directed at the implementation of various cost containment measures. The cost to income ratio ended the period at 51% (without day 1 adjustments), against the internal benchmark of 50%.

In the same statement, Stanbic Bank Board Chairman, Gregory Sebborn, said the institution ended the period under review with a qualifying core capital of ZWG1.5 billion (USD107 million) surpassing the local currency equivalence of the required USD30 million regulatory minimum core capital.

Sebborn said Stanbic Bank continues to support the growth and development of various industries through its Business and Commercial Banking, as well as its Corporate and Investment Banking portfolios in alignment with its unwavering commitment to sustainability.

"Our dedication to driving growth within our country remains at the forefront of our operations," said Sebborn.

This indeed is in line with Stanbic Bank's purpose "Zimbabwe is our home; we drive her growth."