CHAIRPERSON’S STATEMENT

Operating Environment

The scheme of reconstruction, whereby shareholders approved the transfer of all Ecocash Holdings Zimbabwe Limited non-banking assets to Econet Wireless Zimbabwe Limited, with effect from 1 March 2024, has now been completed. During the reconstruction period, the business was focused on restructuring and reimagining the Bank, to align with the vision of a premier provider of digital financial solutions. The company also responded to the complex operating environment through innovative solutions to address the changing needs of customers.

The Bank Reimagined

The Bank continued with the business remodelling process that began in the prior financial year. The focus was on three strategic pillars: people, processes, and technology. This exercise brought about rapid process automation, product optimisation, head count rationalisation, and adoption of new technologies to enhance our service delivery. The outcome of this important exercise is expected to enhance our performance going forward.

Digital Bank Milestones

The Bank made significant progress in driving the digital agenda through process automation as well as the enhancements of its digitally oriented products. The Bank implemented Visa Card reloads which increases convenience to the customer.

Financial Performance

On the 5th of April 2024, the Reserve Bank presented the 2024 Monetary Policy Statement, which introduced a new currency, Zimbabwe Gold (ZWG). As a result, the financial statements are now presented in ZWG. To comply with International Financial Reporting Standards, specifically IAS 29 ‘Financial Reporting in Hyperinflationary Economies’ and IAS 21 ‘The Effects of Changes in Foreign Exchange Rates,’ the Group had to restate prior year comparatives to April 5, 2024, using the inflation index. Consequently, the Group recognized monetary losses amounting to ZWG 148.7 million due to this process. These losses arose from the restatement of opening ZWL balances according to IAS 29 guidelines before subsequent conversion to ZWG.

The group recorded significant fair value gains amounting to ZWG 1.2 billion on the proceeds received from the scheme of reconstruction which were denominated in Zimbabwe Stock Exchange listed Econet shares. Profit before tax was ZWG 1.66 billion, representing a significant growth from ZWG 144.6 million recorded in the same period prior year.

Distribution of the Consideration for the Scheme of Reconstruction

After the half-year period, the Board of Directors of EcoCash Holdings Zimbabwe Limited declared a distribution out of the proceeds realized from the transfer of the non-banking business units to Econet Wireless Zimbabwe Limited. The distribution payment comprised cash ZWG 910 billion (equivalent to 236,371,255 Econet Shares), and 236,371,255 distributed as Econet shares.

Capitalisation

The capital adequacy ratio for the Bank as of 30 June 2024 stood at 22.66%, above the mandated regulatory minimum of 12%. Steward Bank is compliant with Tier 1 capital requirements as prescribed by the Reserve Bank of Zimbabwe.

Future Outlook

The business will continue to drive innovation, by leveraging on digital technologies which will increase operational efficiencies. We will grow our partnerships and collaborations to meet the ever changing customer needs. We are dedicated to providing exceptional service to our customers through seamless and efficient banking channels.

Appreciation

On behalf of the Board, I extend heartfelt gratitude to our customers, business partners, shareholders, and stakeholders for their unwavering support. I also thank the EcoCash Holdings employees, management, executive team, and Directors for their passion, commitment, and dedication, which have been pivotal to our growth and success.

On behalf of the Board

Sherree Shereni
Board Chairperson

13 November 2024

Related Download

EcoCash Holdings Unreviewed Abridged Consolidated Financial Statements for the half year ended 31 Aug 2024.pdf