An analysis of the profitability of structured commodity finance: The case of Stanbic Bank Zimbabwe Agribusiness Department

Abstract

The study sought to establish how Structured Agro-commodity Finance contributes to sustainable profitability of Stanbic Bank Zimbabwe’s agribusiness department and the whole financial institution. The study was localised at agribusiness department level to allow in-depth coverage of the research dimensions and also taking advantage of the bank’s financial reporting framework that requires the bank to report at department level as well as consolidating financial reports to streamline non performing operations and products. Major problems at Stanbic Bank Zimbabwe are scarcity of loanable funds and the need to sustain profitability through efficient resource allocation. This research addressed the same problems through statistical research methods. The main purpose of this study was to assist management with such streamlining decisions at agribusiness department level by clarifying how profitable and important is Structured Commodity Finance to the department. Management is able to make informed allocation decisions on scarce loanable funds to all agribusiness products for optimum profits. The study has indicated that Structured Commodity Finance is a very important product to the overall profitability of the bank and it is a product that should be fully supported by the agribusiness leadership.