Revenue growth sees BancABC profits jump to $3,2 mln in H1

Revenue growth sees BancABC profits jump to $3,2 mln in H1

HARARE, August 30 (The Source) – Atlas Mara’s Zimbabwe unit BancABC reported a massive jump in after tax profits to $3.2 million in the half year to June from $200,000 during the same period in 2016, on cost containment and growth in revenue.

During the period, Net interest income increased 25 percent to $15.5 million compared to $12,4 million in the prior year driven mainly by growth in earning assets and better asset and liability management..

Fees and commission declined 26 percent to $3,9 million from $5,3 million in 2016 due to a combination of decline in fees from lending activities and impact of price caps by the Central Bank.

“It is however, expected that once some of our digital initiatives come to market, fee and commission income will start to show a steady increase,” Mabhena said.

Dealing income on other hand rose 68 percent from $1,4 million to $2,4 million on the back of an increase in foreign currency trading volumes by the bank’s global market and treasury team.

Operating expenses declined to $16,3 million from $17,3 million as a result, the cost to income ratio improved from 90.3 percent to 75.4 percent during the six months period.

The bank recorded a net impairment charge of $300, 000, an improvement of 79 percent which the chairman said largely reflects the strategic objective to recover amounts previously written off and reduce risk.

“While some customers continue to face financial difficulties, new defaults remained at low levels across all portfolios in 2017,” said Mabhena.

The bank’s balance sheet surged 17 percent to $14 million compared to prior year. Mabhena said work to reduce overall risk has been improving customer sentiment and attracting an increased level of deposits.

“Adding to this, the Bank also participated in a major infrastructure project resulting in issuing a $50 million corporate bond to help fund road rehabilitation.

The Bank’s capital adequacy ratio remains well ahead of regulatory requirement of 12 percent at 22.5 percent driven by a decrease in risk weighted assets as as profit retained from operations. Core capital at the end of the period was also above the minimum capital of $25 million, an increase of 12 percent to $74.4 million.