New Zimbabwe (London)

6 May 2014

Zimbabwe: Steward Bank in U.S$26 Million Loss, Sees Ecocash Boost

STEWARD Bank, the wholly-owned subsidiary of Econet Wireless Zimbabwe, posted a loss of US$26,3 million as the company continues restructuring away from traditional banking to focus on services related to mobile banking.

Econet Wireless CEO, Douglas Mboweni, said he was confident the bank would soon turn to profitability.

He said the bank had played a critical role in the development and management of EcoCash, which is now processing more than US$350 million in transactions a month.

"In terms of our strategy, the revenue model of Steward Bank was always going to be pinned on EcoCashSave and EcoCashLoan," said Mboweni.

"We first of all had to get the money transfer services up and running before launching these other services.

"We have now launched these services in the last few months. By this time next year, you will see a very different Steward Bank."

The Econet CEO said more than 1,5 million customers have opened accounts with Steward Bank using EcoCashSave.

Some of the account holders were Zimbabweans in the Diaspora, who saw it as a convenient way to support their families at home.

Mboweni explained that the business strategy of the Bank was unique and relied on innovation and technology and therefore did not require the level of staff that is ordinarily needed by a traditional bank.

Steward, formerly known as TN Bank, recently laid off 127 employees, about 40 percent of its workforce, to cut costs as it continues to "clean up" its forerunner's legacy, sources familiar with developments.

"It was not an easy decision, and we really agonised over this issue, but we realised that the bank would not be able to grow unless we restructured it to operate an innovation-led model," he said.

"If the economy had been performing better, we may have been able to sustain some of these marginal branches, but it has not happened. It is something we regret and we will try our best to create new jobs in other areas as we have always done."

In terms of capital, Mboweni said Steward Bank was in the top five most capitalised banks in the country and would receive more capital as required from Econet to allow the bank to develop more mass-market banking products.

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