Harare — Metropolitan Bank of Zimbabwe recorded a net profit of US$1,15 million for the half-year period ended June 30 2010.

The bank's chairman Mr Wilson Manase said in a statement that the bank's largest cost component besides staff costs was rentals due to increases in rental charges during the period under review.

"In line with outgrowth strategy the bank's results were mainly driven by non interest revenue with major contribution being management and establishment fees and ledger fees.

"Although the sector remains somewhat bedevilled by liquidity constraints compounded by unavailability of favourable credit lines which slowed the economic growth prospects, the banking sector continues to defy the odds by registering notable growth as the economy continues to shift back into the formal way of doing business," he said.

The bank said that interest rates and bank charges were noticeable coming down in tandem with the marginal increase in bank deposits. "Contribution from interest on loans and overdrafts was relatively low due to depressed lending activities.

"Impairment on loans and advances amounted to US$190 969, good progress was made during the period under review to ensure that the loan book is not compromised," the bank said. Metropolitan Bank's capital adequacy ratio stood at 41,45 percent which is well above the minimum prescribed ratio of 10. Its cost income ratio was at 72 percent, which was slightly below their medium term objective of 75 percent; it will continually strive to improve its cost income to cost over the medium term.

Though the country's financial sector is slowly finding its position again with marginal inter-bank market activities gradually picking up, the problem associated with the absence of a lender of a last resort is being addressed.

These overtures are being undertaken by the monetary and fiscal authorities to capacitate the central bank so that it can be effective player in the financial service sector the bank said.

In May this year Metropolitan Bank entered into a partnership with Travelex to issue the USD denominated Cash Passport Card. The Cash Passport Card is a Visa Electron card and is the modern day version of Travellers Cheques. It enables people who are travelling outside Zimbabwe to travel with funds for their trip in a secure and modern fashion.

"The benefit of using this card is the security of account holders' funds; they will not be carrying cash. The use of the card at ATMs and POS machines requires a PIN number and a signature. In the event the card is stolen or lost it can be stopped and a replacement card issued wherever one may be in the world.