STANDARD Chartered Bank Zambia Plc has posted huge losses of over K225 million after tax during its half-year period ending June 30, 2020, mainly induced by the kwacha’s massive devaluation and the bank’s impairments on financial instruments.
According to its unaudited half-year results, StanChart posted losses of around K225.5 million in its half-year financial period ending June 30, 2020, compared to earning a K123 million profit in the prior corresponding period last year, mainly triggered by a significant kwacha depreciation, leading to higher operating expenses, among others.
“The bank reported a loss of ZMW225m compared to prior year profit of ZMW123m. This was mainly due to: Increase in operating expenses of 10 per cent on account of expenses relating to Personal Protective Equipment for the current COVID-19 pandemic. The depreciation of the kwacha also increased the foreign currency denominated expenses; impairment on financial instruments increased from K36m in June, 2019, to K434m in June, 2020, this was split as follows: loan impairment at K146m in comparison to K36m the same period prior year, and Expected Credit Losses (ECL) on government securities at K288m in comparison to K24m in 2019,” stated StanChart stated in a statement availed by brokers, Stockbrokers Zambia Limited.
“The above were negated by an increase in total revenue of 9 per cent, mainly due to interest from investment securities, which was driven by growth in balance sheet holding.”
On the other hand, StanChart’s customer deposits grew by 19 per cent on account of increased demand, driven by the bank’s digital campaign.
“Customer deposits grew by 19 per cent, year-on-year, mainly on account of increase in demand deposits impacted by the bank’s digital campaign. Investment in securities increased by 62 per cent, mainly on Treasury Bills. This was due to more liquidity in the market compared to the prior year. Balances with banks abroad increased by 14 per cent, year-on-year. Loans and advances reduced by 20 per cent year-on-year,” stated StanChart.