Econet`s Steward Bank Records $26.3million Loss

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[headlines headline=”h3,” ]Steward Bank, the wholly-owned subsidiary of Econet Wireless Zimbabwe, posted a loss of $26.3million as the company continues restructuring away from traditional banking to focus on services related to mobile banking[/headlines].

Econet Wireless CEO, Mr Douglas Mboweni, said he was confident that 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 $350million in transactions a month.

By Tongai Mwenje

Steward Bank had earlier on hinted to close about eight branches across the country, rendering more than 100 employees jobless, as the bank seeks to streamline its costs.

The financial institution, is currently operating on a total of 20 branches, with a total of four of those already shutdown and the other four already bringing curtains down. 

Econet Wirreless Zimbabwe CEO Mboweni

This is happening few months after Mboweni had declared that Steward Bank is safe, strong and liquid, and will not be affected by the liquidity crisis.

“In terms of our strategy, the revenue model of Steward Bank was always going to be pinned on EcoCashSave and EcoCashLoan. 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.”
Mr Mboweni said more than 1.5million customers have opened bank 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.

The Econet Wireless CEO articulated 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 required by a traditional bank.

“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.  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, Mr 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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