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Barclays to raise US$100m for business

BARCLAY’S Bank Zimbabwe says it will raise US$100 million offshore loans by the end of June to support recovery of local businesses.
However, under the banks model lending priority will be targeted depositors first and then at businesses that have, among other requirements, healthy cash flows.
Managing director George Guvamatanga told an Imara investors’ conference held in Harare last week that business recovery was key to sustainable growth of the economy.
“By the end of June we should have raised up to US$100 million offshore loans to support Zimbabwean businesses those who are on the right side of recovery,” he said.
Barclays grew a quality loan book by 26 percent over the year to April 2014 while deposits declined by five percent.
The banks’ strategy of being the ‘Go-To’ bank is in course.
“We grew a quality loan book by 26% whilst impairment remained below 1% … Interest income year-on-year growth is 13% and non-funded income year-on-year is 1% while operating costs remained flat,” he said.
“Non-funded income growth of 1% is subdued reflecting constrained growth in transactional activity. Loan loss ratio (0.7% growth) still reflects a strong loan portfolio.
“Focus on the quality of the loan book is to increase in view of the conditions prevailing in the market.
Operating costs were contained within 2013 levels although there continues to be pressure on certain costs lines especially occupancy and IT related lines.
Guvamatanga said the liquidity challenges affecting the economy also had to do with people’s perception and misunderstanding of a US dollar economy. He said businesses translated the Zimbabwean dollar cost into the dollarized environment.
In the outlook, Guvamatanga said the economic landscape required significant decisive interventions to enhance investor confidence, promote local production and contain the imports bill.
“Clarity on key policies that foreign investors consider is critical. Under a stable to improving economic landscape Barclays would sustain growth in the loan book and off shore lines of credit from current levels.
“At current run rate, the bank would close the year at lower than planned loan and deposit levels. The bank will continue efforts to enhance and integrate its e-channel platforms,” he said.Advertisement

He noted that cost, scale and efficiency initiatives will become more critical under sub optimal economic performance.