EcoCash Reports Significant Repositioning Driven B...

EcoCash Reports Significant Repositioning Driven By Remittances, Green Energy

Nyashadzashe Ndoro

Chief Reporter

EcoCash Holdings Zimbabwe Limited has announced a significant repositioning of its business, with a focus on its banking unit, Steward Bank Limited, following the approval of a Scheme of Reconstruction by shareholders.

In its trading update for the first quarter ended May 31, 2024, the company reported a strong financial performance, driven by growth in FCA transactions, remittances, and green energy initiatives.

The company has been focused on transferring non-banking assets to Econet Wireless Zimbabwe Limited, leaving only the banking unit, Steward Bank Limited, under EcoCash Holdings. The trading update reflects the performance of Steward Bank Limited.

During the quarter, the Reserve Bank of Zimbabwe introduced a new currency, Zimbabwe Gold, backed by gold reserves, and reduced the bank policy rate from 130% to 20% per annum. These measures are expected to reduce inflationary pressures in the short to medium term.

Steward Bank achieved a quarterly historical revenue of ZWG403 million and a historical Profit after Tax of ZWG214 million. The performance was driven by FCA transactions, which grew by 36% compared to the same period last year. FCA inflows increased by 284%, and active FCA accounts rose by 78%. Remittance volumes also remained strong, with an 8% increase compared to the prior year's period.

The bank has accelerated its green energy initiatives, partnering with Distributed Power Africa to offer Power as a Service. Installations increased by 47% compared to the previous quarter, with a 51% improvement in green energy revenue.

Steward Bank Limited's capital adequacy ratio stood at 44.85% as of March 31, 2024, above the mandated regulatory minimum of 12%. The bank says it is compliant with Tier 1 capital requirements prescribed by RBZ.

The company is optimistic about the future and "well-positioned to continue building on our momentum and creating long-term value for our shareholders through continued innovation, leveraging on digital technologies, prudent cost management and optimisation of our operational efficiency.”