IDBZ sets tar­get on bad loans col­lec­tion

Chronicle (Zimbabwe) - - Business - Harare Bureau

THE In­fra­struc­ture Devel­op­ment Bank of Zim­babwe is tar­get­ing to col­lect at least 80 per­cent of its bad loans by year-end, fi­nance di­rec­tor Cas­sius Gambinga has said.

Mr Gambinga said the bank was tar­get­ing to re­duce non-per­form­ing loans to $1 mil­lion from $8 mil­lion in De­cem­ber 2015. As at De­cem­ber 31, 2014, the NPLs stood at about $20,4 mil­lion.

“The ex­pec­ta­tion is that by end of the year we would have col­lected $8 mil­lion out of the $9 mil­lion (of the) out­stand­ing loans,” Mr Gambinga told a me­dia and an­a­lysts brief­ing yes­ter­day.

“It is a com­bi­na­tion of col­lec­tion of the ac­tual cash; there are cer­tain cases in which we have re­ceived judg­ment from the courts and we are as­sured of get­ting pay­ments.

“The other one is in terms of where we are trans­fer­ring to ZAMCO and we are al­most 80 per­cent with the trans­ac­tions. So those two trans­ac­tions should be able to cover us.”

The Zim­babwe As­set Man­age­ment Com­pany, a ve­hi­cle es­tab­lished by the Re­serve Bank of Zim­babwe re­spon­si­ble for ac­quir­ing, man­ag­ing, re­struc­tur­ing or dis­pos­ing of non­per­form­ing loans has so far taken over IDBZ’s bad loans amount­ing to $4,2 mil­lion.

The bank said the NPL ra­tio has im­proved from 24 per­cent in June 2015 to the cur­rent level of 8 per­cent, well within the 10 per­cent the Re­serve Bank tar­get set for the mar­ket.

“The tar­get of 5 per­cent will be achieved by the end of the year,” said Mr Gambinga.

In the trad­ing up­date, the IDBZ re­ported a profit of about $200 000, driven by in­creased in­come from long term busi­ness. Chief ex­ec­u­tive Mr Thomas Zondo Sakhala said the bank had to cur­tail short term lend­ing to pro­vide long term loans in line with its man­date.

The bank also at­trib­uted the prof­itabil­ity to strong liq­uid­ity po­si­tion, with con­sid­er­able in­come be­ing gen­er­ated on the in­ter­bank mar­ket from the trad­ing of se­cu­ri­ties as well as ef­fec­tive cost man­age­ment.

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