IDBZ sets target on bad loans collection
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.