Steward Bank‘s Profits Skyrocketed Boosted by 176k New Customers

Steward Bank is a wholly owned subsidiary of Econet Wireless Zimbabwe. It’s core purpose and strategic goal is to foster financial inclusion through innovation, making banking cost-effective, universal and accessible to every Zimbabwean. The Bank has significantly grown due to its bold strategy to pursue a digital banking model anchored on transactional banking and a seamless integration with the EcoCash mobile money platform as a central pillar.

Steward Bank recorded 176 000 new customers, which helped grow its profit after tax by 268,4% to $22,45 million for the financial year ending February 28, 2018. This was from a previous of $6,15 million recorded over the same period last year.

We are all aware of the fact that when the cash crisis was at its peak, (some may argue that it still is), remember that the majority of banks were not opening accounts because they simply did not have money to give to customers. Guess what? Steward defied all odds, it kept opening accounts. Now, due to the cash crisis and the bad economy generally, banks are making money out of transaction fees and not lending. This means that whoever has the most customers also earns more, thus simple math.

Steward bank is now the largest bank in Zimbabwe by customer numbers at 600,000 which is an equivalent of 28% of Zimbabwe’s total banker population.

In a statement accompanying the results for the period under review yesterday, Steward Bank Chief Executive Officer, Lance Mambodiani said a surge in transactions from customers was behind the improvement in profits.

“In the financial year under review, the bank recorded a profit before tax of $32,7 million due to the growth in revenue driven mainly by an increase in transactional volumes on our digital platforms,” he said.

The increase in transactions led to a 125,26% increase in non-interest income to $63,06 million for the period under review from $27,99 million.

“The bank experienced an unprecedented surge in the volume of transactions processed, which required us to respond with a significant investment to upgrade our technology platforms and systems.”

The growth of customers led to a 141% jump in deposits to $348,2 from $144,6 million recorded in the 2017 comparative period.

This translated to a 86,89% growth in its net interest income to $13,29 million from a previous of $7,11 million in the 2017 comparative.

But, this was not due to higher loans and advances were down to $32,82 million for the period under review from around $57 million in the 2017 comparative.

The bank managed to record an uptick in the net interest income despite loans declining due to mortgage loan disbursements, increased activity on the interbank market and investments in held-to-maturity assets.