HARARE, August 18 (The Source) – The Agricultural Bank of Zimbabwe (Agribank) has posted a profit of $2,16 million for the half year ended June 30, 2016 recovering from a loss of $3,76 million in the comparable period in 2015.
Agribank, which met the prescribed $12 million capital, said it will be talking to government to raise its capital to $100 million by 2020, as part of its recovery strategy, while it will soon be on the market to raise $20 million in agro-bills.
The bank said profit was largely driven by business growth strategies implemented in 2015, a staff rationalisation exercise and the sale of non-performing loans to the Zimbabwe Asset Management Corporation, a Reserve Bank of Zimbabwe unit that buys toxic loans from banks.
“The profit was mainly a result of the positive outcome of the bank’s business growth strategies implemented following the conclusion of the staff rationalisation and injection of capital by the shareholder in 2015,” said the bank’s chairman Sij Biyam in a statement on Thursday.
Agribank is wholly owned by government.
Net interest income, at $6,49 million, was 89,2 percent higher than the $3,43 million reported at the same time last year.
Non interest income increased by two percent to $7,1 million, from $7 million during the same period in 2015.
The cost containment measures reduced operating costs by 16 percent to $10,88 million.
Loans and advances dropped 8 percent to $104,69 and the bank said it will prioritise asset quality to minimise NPLs through tighter lending.
The bank recorded a 14 percent growth in assets to $192,8 million from $168,9 million in December 2015.
“This is a positive development compared to the same time in 2015,” Malaba told reporters on Tuesday.
“We positively benefitted from cost containment measures. We will be seeking further capital. We want to be a Tier 1 bank with $100 million capital so that we support agriculture, which is the backbone of this economy, now that we are off the OFAC list. It is an issue we have discussed with the shareholder. Together with FBC, we are raising $20 million agro bills,” said Malaba.