GetBucks makes inroads into international banking segment

LISTED financial services firm, GetBucks Microfinance Bank, is upbeat of its prospects after being awarded a dealership licence to participate in international banking segment.

The authorised dealership licence was granted on 12 August 2020.

“This was an exciting development that will enable the microfinance bank to offer a broader range of products to its clients whilst increasing foreign currency transactional income,” said chairman Dr Rungamo Mbire in a statement accompanying financials for the year to December 2020.

Additionally, the microfinance bank also received lines of credit which it will deploy into the loan book to increase interest income. During the year to December 31, 2020 interest income came in at $82 million from $68 million recorded in the six months to December 2019. Net interest income for the year under review came in at $43 million from $38 million reported in the six months to December 2019.

The financial services firm reported a net loss of $45 million during the year to December 31, 2020 representing a 159 percent decrease from prior year.

Dr Mbire said this was a result of a net monetary loss of $29 million as the microfinance bank’s assets were predominantly monetary assets.

The year under review was also characterised by economic challenges worsened by the outbreak of the Covid-19 pandemic.

“The past year was a challenging one due to the impact of hyperinflation and the Covid-19 pandemic. The market continued to suffer from inadequate foreign currency although this problem was partially addressed by the introduction of the Foreign Exchange Auction Trading System by the Reserve Bank of Zimbabwe.

“The hyperinflationary environment significantly increased the cost of doing business with particular pressure being felt by employers in relation to staff wages,” he said.

During the year under review, borrowings halved to $100 million from $210 million to due to the effects of inflation, which closed the year at 348 percent compared to an annual inflation rate of 521 percent as of December 2019.

According to the group, these funds were deployed into the loan book though it also reduced to $82 million from $173 million on inflationary pressures.

The remaining funds were part of the cash and cash equivalents that grew 35 percent to $149 million.

At $116,7 million, customer deposits increased were 104 percent above prior year’s $57,1 million on an aggressive deposit mobilisation strategy.

Operating expenses proportionally increased during the period under review to $160 million from $115million primarily driven by a general increase in the cost of doing business.

At $438,3 million, total assets went down by 26 percent compared to $589,7 million recorded in the prior year due to the effects of inflation affecting the monetary assets movement. The microfinance bank’s net equity position was $175,6 million translating to US$ 2,1 million.

Dr Mbire indicated the microfinance bank is working on strategies to ensure compliance with the new requirement of the local currency equivalent US$ 5 million effective 31 December 2021.

No dividend was declared for the period under review as the microfinance bank seeks to increase its capital in order to meet the new capital requirement by 31 December 2021.