$5 bond note. File picture: Xinhua
HARARE - Forget about the financial and liquidity woes afflicting Zimbabwe’s economy as banks in the country are raking in the profits, with Standard Chartered’s unit and Bob Diamond’s BankABC raising after tax earnings.

Challenges, however, have always come when trying to remit dividends to foreign shareholders as in the case of the two banks.

Banks and supermarket chains have been registering income growth as people have no option but to use finance institutions and formal retailers owing to cash shortages.

The Zimbabwe unit of Standard Chartered said last week that after tax profit for the interim period to June rose 13% to $6.83million (R88.30m). The profit surge has been attributed to cost containment and credit loss reduction.

“These initiatives countered the slow revenue momentum occasioned by the prevailing tough operating environment,” board chairperson Lovemore Manatsa said.

Other foreign banks in Zimbabwe include units of Standard Bank, Barclays, Nedbank and Ecobank. The banks have been running out of cash and have instead switched to electronic forms of payments to settle depositors’ transactions.

The central bank’s directive that banks cap interest rates has seen fees and commission income for Standard Chartered Zimbabwe decline from $17.1m in the 2016 half year period to $16.8m by the end of June 2017.

After tax profits in BancABC, which is controlled by Diamond’s Atlas Mara have also surged during the same period. The company said that the after tax position had surged massively from about $200000 in June last year to $3.2m in the same period this year, largely driven by income and a lowering of costs.

Net interest income for the 2017 interim period in BancABC Zimbabwe soared 25percent to $15.5m. However, in line with other banks, fees and commission income was down by 26percent at $3.9m.

The bank has had challenges with non performing loans in the past few years and has seen a reduction in its lending activities.

-BUSINESS REPORT