New Zimbabwe.com

Agribank posts $4.1 million first half profit

By Chris Mahove

Agricultural Development Bank of Zimbabwe (Agribank) posted a 4.1 million dollar profit for the half year ending June 30 at the back of significant growth in productive lending and non-funded income.

Addressing a press conference in Harare Wednesday, Agribank CEO, Sam Malaba said this was an 89 percent jump in profits from 2.2 million recorded during the same period in 2017.

“Non-funded income, at 7.1 million, grew by 82 percent from 3.9 million for the half year ended 30 June 2017. The bank’s growth in non-funded income was due to significant growth in customer accounts as well as transactions particularly through the electronic banking channels,” he said.

The Agriculture portfolio, Malaba said, had recorded significant growth in the second quarter, with loans and advances closing at 134.99 million dollars from 95.8 million, a surge of 41 percent.

Malaba said the bank was also realising benefits from the mobilisation of cheaper retail deposits, which helped reduce the average cost of funding.

Total operating expenses, he said, were up 11 percent, closing at 12.8 million dollars for the half year ending 30 June, 2018, a development he said was in line with the business growth initiatives undertaken during the same period.

“Despite the growth in operating expenses both the total costs to income ratio and the staff costs to income ratio remained at 68 percent and 31 percent respectively in comparison to the half year ended 30 June 2017,” he said

He added that the bank was now on course to achieving a full year staff cost-to-income ratio of 30 percent or below in compliance with the benchmarks set for all state owned enterprises.

However, total assets as at 30 June declined by two percent to 262.6 million dollars compared to 268.84 in the same period last year.

“The decline in total assets was mainly due to the 10 percent reduction in deposits from customers. The reduction is in line with the liquidity supply patterns on the market,” he said.

Expanded productive lending to the agriculture sector led to a 41 percent increase in gross loans advances from 95.89 million in the same period last year to 134.99 million.

The liquidity ratio, at 58 percent, was above the statutory requirement of 30 percent, while treasury bills holdings made up 27 percent of total assets at 70.1 million dollars, down from 76.9 million dollars as at December 2017, which was due to the maturities of the ZAMCO Treasury Bills, which were worth 16 million dollars.