Stanbic Bank Zim’s 2024 Performance: Bank Charges and Money Changing Remain Important

Stanbic Bank Zimbabwe posted strong financial results for the year ending December 2024, with a historical cost profit of ZWG 1.1 billion.

After adjusting for some accounting exceptions, the profit stood at ZWG 1.4 billion.

This growth was driven by increased net interest income and gains from foreign currency positions.

Or, in simple terms, it’s from giving out loans and charging interest and also from “money changer” activities.

Interest vs. Non-Interest Income: The Zimbo Standard

Historically, banks made most of their money from lending and charging interest. This is interest income, and it remains the most natural way for banks to make money.

However, over the years, banks have diversified their income streams and now earn money in other ways.

Non-interest income mainly comprises fees and charges, earnings from share trading, and foreign exchange transactions, etc.

One of the interesting details from the report is Stanbic’s heavy reliance on non-interest income (a.k.a. bank charges and fees). Net interest income increased by 8% to ZWG 1.0 billion, but non-interest income ballooned to ZWG 2.9 billion, making up 74% of the total income of ZWG 3.9 billion.

This ratio is unusual when compared to global banking norms. Internationally, traditional banks typically derive 60-70% of their income from net interest (loans and credit products).

So, where Stanbic (and other Zimbabwean banks) have non-interest income contributing 74% to total income, internationally, that proportion is in the 30-40% range.

Stanbic Bank Zimbabwe’s dependence on non-interest income suggests it earns a significant portion from fees, commissions, and gains on foreign currency transactions—revenue streams that can be more unpredictable than traditional lending income.

However, this being Zimbabwe, even interest income is unpredictable, as you shall see later.

This imbalance comes from Zimbabwe’s crazy economic environment. Currency volatility presents opportunities for profit on foreign currency positions.

Each and every one of us has made a profit or incurred losses from currency movements. This will continue to be the case for as long as we have a currency that is as volatile as all of ours have been. So, banks are understandably in the currency game too.

The Story Gets Crazier When We Get to Interest Income—You Know, Core Banking Stuff

Earlier in 2024, high lending rates (reaching 130%) boosted interest earnings. As I’m sure you would appreciate, banks made a killing when they could charge 130% in interest for loans they gave out.

However, the sharp drop to 35% by year-end stopped that particular gravy train of interest income growth.

See, this is what I meant when I said that even interest income can be unpredictable in Zimbabwe. You can start out a year earning 130%, and by the end, it’s 35%.

The lower rates are probably good for the economy, but the wild swings are not good for anyone.

Gains from ‘Money Changer’ Activities

A significant portion of Stanbic’s non-interest income came from foreign currency gains (“change money shenanigans”).

These arise when the bank buys or holds foreign currency and its value increases against the local currency—a game we have all played.

While this strategy boosts earnings, it also exposes the bank to potential losses if the currency moves in the opposite direction. This is the country of Nicodemus currency devaluations, and so this is a real risk.

Loan Growth and the Impact of Falling Lending Rates

Stanbic Bank’s net lending book nearly doubled from ZWG 4.2 billion to ZWG 8.4 billion. This increase in loan issuance is great to see in an economy starved of funding and credit.

While this expansion means the bank lent significantly more money, its profit margins were squeezed by falling minimum lending rates. Lower rates mean the bank earns less interest on each loan, limiting the profitability of its larger loan book.

That’s how you would look at it from the business point of view. As a corporate or one of the few lucky individuals even able to access loans at ridiculously high interest rates, the revision of interest rates was a welcome change.

At the same time, the customer deposit base grew by 119%, supported by increases in both local and foreign currency deposits, strengthening the bank’s liquidity position.

Managing Costs in the ZWG Era

Operating expenses rose by 21% to ZWG 1.6 billion. A major factor was the 80% depreciation of the local currency in September 2024, which increased costs which are in the Zimbabwean currency.

The Cost of Doing Business in Zimbabwe

For 2025, Stanbic Bank identified several key risks:

• Electricity supply disruptions
• Tight market liquidity
• Climate-related uncertainties, such as delayed rainfall
• Geopolitical tensions
• Weak mineral commodity prices

Overall, Stanbic Bank Zimbabwe’s 2024 results show both aggressive growth and the realities of operating in a volatile economy.

While the bank remains financially strong, its unusual income structure (though usual in Zimbabwe) and the pressure on future lending margins will be interesting areas to watch.

I still feel silly saying 35% interest rates can be considered low. However, in the context of a large shift from 130% in less than a year, it’s a real concern. Planning in such a volatile environment can be tricky.

All that said, I’m just sick of high banking charges.

It remains ridiculous that leaving money in a bank account in Zimbabwe will see the balance decrease, as your kickback from the 130% or 35% interest the banks earn from your deposits does not trickle down to you in any meaningful way. Rather, charges will exceed whatever little interest you earn.

Stanbic Bank Zimbabwe achieves strong 2024 performance 

Stanbic Bank Zimbabwe achieved a historical cost profit of ZWG1,1 billion for the year ended 31 December 2024.

After adjusting for once-off technical accounting losses of ZWG 389 million incurred on its investment property portfolio at the beginning of the year, when the bank’s functional currency changed, and fair value gains of ZWG 51 million after an independent property valuation, the sustainable historical cost profit was ZWG 1,4 billion. 

The Bank’s Chief Executive, Solomon Nyanhongo, attributed the strong performance to increased interest income on the one hand and unrealised gains on various currency positions that the Bank had taken on the other hand.

Net interest income increased by eight percent from ZWG 954 million in 2023 to ZWG 1,0 billion in 2024. Non-interest income amounted to ZWG 2,9 billion, giving a total income of ZWG 3,9 billion.

“The uplift in net interest income achieved during the period was largely driven by the increase in the Bank’s net lending book from ZWG 4,2 billion in December 2023 to ZWG 8,4 billion as new lending assets were written during the period, combined with the currency depreciation which was experienced in September 2024,” he said. 

“The robust growth in the Bank’s lending book in local currency terms was partially offset by the downward revision in the minimum lending rates from as high as 130 percent in  February  2024 to close the year at 35 percent,” Mr Nyanhongo said.

He said the Bank registered a growth of 119 percent in its customer deposit base, reinforced by growth in both foreign and local currency deposits as new customers were acquired, combined with the upward impact of currency depreciation on USD deposits when expressed in ZWG.

“The Bank’s total operating expenses of ZWG 1,6 billion increased by 21 percent from ZWG 1,3 billion in the comparative period underpinned by the impact of the eighty percent currency depreciation which happened in September 2024. This resulted in the undesired increase in the local currency equivalents of the Bank’s foreign currency denominated expenses,” Mr Nyanhongo said.

The Bank’s corporate social investment initiatives focused on education, the environment, and health and sanitation, with particular emphasis on supporting public health institutions.

During the period being reported, Stanbic Bank donated autoclaves worth USD 80 000 to four key health facilities across Zimbabwe and entered into a USD 75 000 partnership with the Brain and Spine Clinic, which provides life-changing neurological procedures to less privileged individuals. Autoclaves are highly specialised equipment used to sterilise medical equipment in order to minimise infections in hospital environments.  Furthermore, in collaboration with Celebration Health, the Bank funded 50 hernia surgeries for underprivileged children under the age of five.

Mr Nyanhongo expressed his gratitude to all stakeholders for their contribution to the results.

“I would like to express my heartfelt appreciation to our esteemed customers and stakeholders for their unwavering support and commitment as we continue to seek growth in a difficult operating environment”, he said.  

“My deepest appreciation goes to the Stanbic Bank staff and management for remaining steadfast throughout the year. I would like to thank the Blue Bankers for their perseverance, hard work and determination towards providing exceptional customer service and for achieving these commendable results.”

In his statement accompanying the financial results, Stanbic Bank Zimbabwe chairman, Muchakanakirwa Mkanganwi, said the Bank ended the year with a qualifying core capital of ZWG 4.0 billion, which is equivalent to USD 156 million, while the regulatory minimum is the local currency equivalent of USD 30 million.

A dividend of ZWG 339 million was paid during 2024 out of the profits achieved in 2023. An interim dividend of ZWG 516 million for 2024 was approved by the board of directors and paid in November 2024.

“In the outlook to December 2025, major downside risks are likely to include the sustainability of the electricity supply, tight liquidity situation in the market, climate risks (including delayed rainfall), heightened geo-political risks and sluggish mineral commodity price trends,” he said.  He was confident that the Bank would be able to navigate these risks in the outlook period.