Agribank PAT 300pct ahead of budget

Agribank PAT 300pct ahead of budget

HARARE, June 12 (The Source) – State owned Agricultural Development bank of Zimbabwe (Agribank) reported a profit of $1,8 million for the five months to May, over three times the budget, driven by Treasury Bills interest income.

Harare-Interest from TBs income contributed $753,000 to the total profit. Operating income stood at $11,2 million, seven percent above target.

Staff costs ratio stood at 36 percent, amounting to $4,7 million.

The bank has a loan book of $96,8 million. Total retail deposits were 33 percent above the budget to $50,8 million driven by tobacco inflows and merchant Post of Sale (POS) sales.

The bank’s balance sheet for the period under review closed at $221 million, with loans and advances contributing 46 percent while TBs form 35 percent of the balance sheet.

The bank declared a total dividend of $914,000 which government, the sole shareholder, channelled towards capitalisation.

“They (bank) should maintain and remain cautious that they must contain their expenditure so that the ratio of expenditure to revenue is around 30 percent,” Finance Minister Patrick Chinamasa, told stakeholders after the bank’s annual general meeting on Monday

Non-performing loans stood at $14,4 million, with a total NPL ratio of 14.89 percent, which Chinamasa said should drop to around five percent.

He also urged the bank to lend more money to agriculture sector.

“The bank is facing challenges; some of them which are a result of successes that we have achieved; some of them being increased use of plastic money… The ICT structure is not coping, as we are going into the future this is an area they have to attend seriously,” added Chinamasa.

The bank handled a total of $1,7 million plastic money transactions resulting to an ICT challenges.

“The structure may not be ideal in the current operating environment given the treats of high credit risk. Return on TBs, although less risk is generally low in this case about 4 percent. The challenge is therefore to grow the book with quality lending to avoid eroding the relatively high returns with impairments,” said chief executive’s Sam Malaba in a report.