Stanbic calls for economic reforms

Stanbic calls for economic reforms
Published: 03 September 2018 (1607 Views)
STANBIC Bank (Stanbic) has called for currency reforms and measures to support industrial growth, foreign currency generation and price stability in order to put an end to "turbulence in the operating environment", currently fuelled by unsustainable budget deficits.

The mining-focused financial institution, which is a unit of South Africa's Standard Bank, reported strong half-year earnings for the period ended June 30, but urged government to address macroeconomic imbalances, a major source of headwinds to performance.

After-tax profit climbed 28% to $16,4 million from $12,8 million in the comparable period the year before, butressed by net interest income which grew 28% to $32,6 million on account of the "acquisition of additional short-term investment, together with new lending assets which were written during the period," according to a statement by chief executive officer Joshua Tapambgwa.

"The bank's lending book grew by 16% from $330 million as at the end of December 2017 to $384 million re-inforced mainly by the new lending assets which were secured, combined with an increase in facility utilisation by some customers during the period," Tapambgwa said.

Income from fees and commission also rose 20% to $9,4 million as the volume of digital transactions surged as a result of cash shortages, supported as well by the bank's increased digital capabilities and growth in income from custodial services. The bank reported a phenomenal rise in the value of assets under its custody during the period.

The outlook statement by Greggory Sebborn, Stanbic chairperson, dwelled on the most devastating financial fragilities bedevilling the financial services sector, notably foreign currency shortages; excessive money supply growth; currency instability and price instability.

He also called on government to contain fiscal deficits and intervene in the economy with measures to buttress industrial growth, foreign currency generation and sustainable economic growth.

Zimbabwe is in a grave foreign currency crisis. Since 2014, foreign currency reserves have fallen to under two months of import cover, according to a 2017 report on the IMF Article IV consultations with Zimbabwean authorities.

The country also faces crippling cash shortages, which could easily aggravate to currency crisis if left untamed. The crisis has its roots in foreign currency shortages and excessive growth in money supply officially attributed to Treasury's fiscal deficit financing activities especially borrowings through its overdraft facility with the Reserve Bank of Zimbabwe (RBZ).

Through the overdraft facility, the RBZ has created unfunded transferrable deposits to government and its creditors, resulting in unsustainable money supply growth and excessive inflation pressures.

According to the RBZ monthly report for May, the year-on year expansion in transferable deposits hit 51% in May 2018, while negotiable certificates of deposits (NCDs) increased 43%, resulting in about 40% annual growth rate in broad money.

Bond notes and coins in circulation increased at a slower rate of % to $354,20 million in May 2018 from US$175.77 million in May 2017.

The year-on-year inflation rate hit 4,29% in July 2018 from 2,91% in June 2017, an increase of 47.48% in the Consumer Price Index which measures changes in the general price level, driven mainly by food and non-alcoholic beverages, according to the Zimbabwe National Statistical Agency.

For sustainability, these macroeconomic imbalances should be addressed, according to Sebborn.

- newsday

 0

You May Like These Videos

Comments

There are no comments.

Latest stories

MDC slams RBZ currency moves

by ZimLive | 21 February 2019 | 92 Views

Employers not worried by bond notes, RTGS devaluation

by Staff reporter | 21 February 2019 | 90 Views

Monetary policy, a huge leap towards safety

by Staff reporter | 21 February 2019 | 86 Views

Mangudya's retreat to safety is timely.....

by Staff reporter | 21 February 2019 | 79 Views

Zanu-PF School of Ideology to open provincial schools

by Staff reporter | 21 February 2019 | 82 Views

Damnatio memoriae and Robert Gabriel Mugabe National Youth Day?

by Brian Maregedze | 21 February 2019 | 83 Views

Woman scalds daughter with boiling water

by Staff reporter | 21 February 2019 | 80 Views

Fare thee well dear Comrade Callistus Dingiswayo Ndlovu

by Nomazulu Thata | 21 February 2019 | 76 Views

Man to pay $1,000 for killing antelope

by Staff reporter | 21 February 2019 | 78 Views

Teacher cracks pupil's forehead

by Staff reporter | 21 February 2019 | 83 Views

Pupils injured in classroom collapse

by Staff reporter | 21 February 2019 | 79 Views

Cleansing ceremony for Battlefields mines

by Staff reporter | 21 February 2019 | 44 Views

Zanu-PF ups campaigns in Chitungwiza

by Staff reporter | 21 February 2019 | 78 Views

Eddie Cross hails Monetary Policy Statement

by Staff reporter | 21 February 2019 | 87 Views

Chicken 'thief' electrocuted

by Staff reporter | 21 February 2019 | 73 Views

Black market forex rate remains stable

by Staff reporter | 21 February 2019 | 85 Views

Bribe bid kombi crew arrested

by Staff reporter | 21 February 2019 | 69 Views

Banking sector profits jump 61%

by Staff repprter | 21 February 2019 | 74 Views

Willing recolonisation will forever be the hallmark of MDC-Alliance

by Isdore Guvamombe | 21 February 2019 | 72 Views

Zimbabwe to sign air service pacts with Oman, Sri Lanka

by Staff reporter | 21 February 2019 | 73 Views

Diaspora remittances drop

by Staff reporter | 21 February 2019 | 66 Views

Mthuli Ncube declares war on inflation

by Staff reporter | 21 February 2019 | 67 Views

Zimbabwe Communist Party statement on Monetary Policy

by ZCP | 21 February 2019 | 120 Views

MDC officials abducted

by Staff reporter | 21 February 2019 | 132 Views

'Police raided my groceries'

by Staff reporter | 21 February 2019 | 116 Views

Women haggle over hubby

by Staff reporter | 21 February 2019 | 123 Views

PSL clubs in huge dilemma

by Staff reporter | 21 February 2019 | 114 Views

Mtukudzi family mired in controversy

by Staff reporter | 21 February 2019 | 120 Views

Harare- Beitbridge road dualisation gathers pace

by Staff reporter | 21 February 2019 | 100 Views

Madzibaba in public HIV test

by Staff reporter | 21 February 2019 | 95 Views

Stabbing at school

by Staff reporter | 21 February 2019 | 106 Views

Mthuli Ncube says Zimbabwe's inflation rate is being misread

by Bloomberg | 21 February 2019 | 97 Views

Government shows teachers the middle finger

by Mandla Ndlovu | 21 February 2019 | 111 Views

PHOTOS: Mugabe celebrates birthday

by Mandla Ndlovu | 21 February 2019 | 159 Views

Kirtsy Coventry calls youths for a National Indaba

by Mandla Ndlovu | 21 February 2019 | 109 Views

What will a teacher's strike in Zimbabwe mean

by Staff Reporter | 21 February 2019 | 127 Views

ZimJustice unveils new conditions in order to assist more workers

by ZimJustice Communications Department | 21 February 2019 | 110 Views