Standard Bank Mozambique reports 2021 results

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Standard Bank Mozambique reports 2021 results

1:42 CAT | 28 Apr 2022

File photo: O País

Standard Bank Mozambique ended 2021 with net income 9.8% lower than in 2020, according to the report and accounts released today.

Despite the decline from 5.4 to 4.9 billion meticais (from €80 to 73 million), the bank considers the results “remarkable” in the face of an “extraordinarily difficult” environment.

The institution points out as obstacles the Covid-19 pandemic, the armed attacks that led to the suspension of the gas project in Cabo Delgado and the decision of the Bank of Mozambique to suspend Standard Bank from the foreign exchange market for several days.

“While our net interest income grew by 19.8%, compared to the previous year, other income fell by 11.7%, negatively influenced by the results of financial operations, which were substantially lower,” namely in July, the month of suspension, the report states.

Regarding the “serious breaches of a prudential and foreign exchange nature”, alleged by the financial regulator against Standard Bank – leading to the disqualification of the former CEO and another manager – the bank says in the report and accounts that appropriate measures were taken.

“This situation does not define us as a bank”, the document reads.

“Furthermore, every effort is currently being made to ensure that the bank complies with the regulations, at all levels and at all times”, it adds.

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As for other indicators for the year 2021, the solvency ratio dropped from 24.8% to 22.2%, still above the regulatory value of 14% for systemic banks.

Standard Bank is one of three systemic banks in Mozambique – that is, banks of structural importance for the country’s financial system, according to the central bank and the country’s financial regulator – alongside Millennium bim and BCI, both controlled by Portuguese banks.

Standard Bank’s loan portfolio grew by 7.3% in 2021 and the overall loss ratio stood at 0.5% (from -0.1% in 2020).

Credit growth was fuelled by the release of liquidity prompted by the Bank of Mozambique reducing the mandatory reserve ratio – thus also allowing an 8.9% increase in interest-earning assets.

ALSO READ: Millennium, BCI, Standard still the only ‘systemically important’ banks in Mozambique

Of the other two systemic banks in Mozambique, BCI doubled its net income for 2021 compared to the previous year, while Millennium bim is yet to publish results.

Source: Lusa