He said the economy was currently showing strains with industry losing competitiveness against South African manufacturers while the huge debt overhang increased country risk. "At the same time the low disposable incomes had affected how we as a bank shape our strategy," he said.
Mr Guvamatanga said it had been a challenging year for the banking sector, which had to grapple with short-term deposits, a tight regulatory framework and high non-performing loans in the sector, which stood at an average 15,92 percent as at
Mr Guvamatanga said the group's ability to apply consistent, high quality and strong risk management processes and controls had been key to the performance.
The pre-tax line grew 70 percent. "We sustained transaction volumes albeit amid the impact of the MoU on non funded income. Significant customer relationships were regained." Net interest income was up 61 percent to
Finance director Mr Sam Matsekete said the cost to income ratio had come off to 85 percent from 90 percent against 105 percent in F10. Operating expenses were flat at
In line with the Go-To bank strategy the loan book had grown 26 percent to
On the split of the loan book, Mr Matsekete said the bulk at 38 percent were with light and heavy industry. Transport was at 29 percent and individuals at 17 percent. He added that they had deliberately chosen those segments with Mr Guvamatanga saying: "We just don't lend to anybody; but we lend to proven multi-national and large corporations. And those individuals are employees working for the corporations. We select for quality" In the period under review LDR was at 47 percent against a sector average of above 70 percent prior year comparative.
Liquidity ratio had come down slightly at 53 percent from 58 percent but Mr Matsekete added it was still above average and quite a strong position.
The group had closed with an almost similar level of cash as 2012 and is hopeful this would give them room to grow the business. On capital, Mr Matsekete said they will see internally generated capital and might not need an injection from the shareholder.
He said the group had improved adoption of e-channels leveraging high internet and mobile penetration. "We will continue to widen the product offering as a way of increasing transaction volumes to boost income.
The bank would continue leveraging from the
Our thoughts on
The primary business of any bank is managing the spread between the cost of liabilities, and returns on loans, and other interest bearing assets. Given that,
The current unstable operating environment has increased the probability of interest and credit risk and these can literally impel a banks' operational results and negatively affect its financial condition.
The group has clearly laid out performance targets and a consistent conceptual framework which in most cases is a sign of long term stability going forward. The bank has been consistent in its growth strategy and has a fairly good set of financial variables including its capital adequacy, asset quality, profitability and liquidity in comparison to its peers.
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