Agrib­ank bounces back with $2,16 mil­lion profit

Chronicle (Zimbabwe) - - Business Chronicle - Oliver Kazunga

THE Agri­cul­tural Bank of Zim­babwe (Agrib­ank) has notched up a $2,16 mil­lion profit af­ter tax in the half year ended June 30, 2016, emerg­ing from a loss of $3, 76 mil­lion in the com­pa­ra­ble pe­riod last year.

In an unau­dited fi­nan­cial state­ment for the pe­riod un­der re­view, Agrib­ank chair­man Mr Sij Biyam said the profit was mainly a re­sult of pos­i­tive out­come of the bank’s busi­ness growth strate­gies.

“The bank recorded a profit af­ter tax of $2,16 mil­lion for the half-year ended June 30, 2016 reg­is­ter­ing a 157,4 per­cent re­cov­ery. The profit was mainly a re­sult of the pos­i­tive out­come of the bank’s busi­ness growth strate­gies im­ple­mented fol­low­ing the con­clu­sion of staff ra­tio­nal­i­sa­tion and in­jec­tion of cap­i­tal by the share­holder in 2015,” he said. The bank is wholly owned by the Govern­ment. Mr Biyam said the bank has also ben­e­fited from the trans­fer of some of its non-per­form­ing loans (NPLs) to the Zim­babwe As­set Man­age­ment Com­pany (Zamco).

Zamco is a spe­cial pur­pose ve­hi­cle cre­ated by the Govern­ment in 2014 and started op­er­at­ing last year to ab­sorb NPLs from com­mer­cial banks to clean their bal­ance sheets so that they can con­fi­dently trade.

In the half year to June 30, 2016, Agrib­ank’s net in­ter­est in­come in­creased by 89,2 per­cent to $6,49 mil­lion driven by di­ver­si­fied lend­ing.

Dur­ing the pe­riod un­der re­view, non-in­ter­est in­come marginally in­creased by two per­cent from $7,05 mil­lion in 2015 to $7,18 mil­lion this year.

“Cost con­tain­ment mea­sures re­sulted in op­er­at­ing costs de­clin­ing by 16 per­cent to $10,88 mil­lion in the first half of 2016 com­pared to $13 mil­lion over a sim­i­lar pe­riod in 2015. The bank is set to sus­tain cost con­tain­ment in 2016 and be­yond,” said Mr Biyam.

In the out­look, he said medium-term eco­nomic growth prospects for Zim­babwe were pos­i­tive, par­tic­u­larly with suc­cess­ful re-en­gage­ment with cred­i­tors and clear­ance of the ex­ter­nal pay­ment ar­rears with mul­ti­lat­eral fi­nan­cial in­sti­tu­tions.

This is ex­pected to pave way for ac­cess to in­ter­na­tional cap­i­tal mar­kets.

“Agrib­ank en­vis­ages in­creased in­ter­na­tional sup­port and en­hanced pri­vate sec­tor part­ner­ship in agri­cul­ture fi­nanc­ing fol­low­ing the clear­ance of ex­ter­nal pay­ment ar­rears. The bank is con­sol­i­dat­ing its po­si­tion in sup­port­ing agri­cul­ture with spe­cial fo­cus on small holder agri­cul­ture as an in­te­gral part of the agri­cul­ture value chain,” said Mr Biyam. — @okazunga.

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