MBCA Bank Limited, a subsidiary of South Africa’s NedBank, achieved a profit after tax of US$2,104 million for the interim period to June, marginally up from the US$2,077 million recorded during the same period last year
The bank’s net interest income rose to US$5,6 million from US$5,2 million recorded during the same period in 2012 against the backdrop of a memorandum of understanding between local banks and the Reserve Bank of Zimbabwe, which puts a cap on bank charges.
In a statement accompanying its financial results the bank said profits went up despite the limited activity in the economy and the implementation of the Memorandum of Understanding signed between banks and the central bank where interest rates, service and maintenance charges were reduced.
The bank said the increase in operating expenses was mainly as a result of the increase in statutory deposit protection insurance and marketing expenses as the bank sought to increase its visibility to the targeted market segments.
Loans and advances to customers increased by 10,5 percent to US$97,4 million in the period under review from US$88,1 million as at December 2012.
The bank’s total deposits grew marginally by 5,4 percent from US$140, 3 million in December 2012 to US$147, 9 million. Consequently, the loans to deposit ratio increased to 66 percent compared to 63 percent reported in December last year.
Corporate banking, according to a statement released by the bank, contributed 44 percent of the bank’s total revenue, while retail banking and treasury added 39 percent and 14 percent respectively.
Rising operating expenses, which were up 15,4 percent to US$9,1 million, however, affected the bank’s profitability despite a steady increase in incomes.
“The group maintains a positive view of the future and has thus positioned itself to take advantage of opportunities that may be presented by the political and economic environment after the harmonised national elections,” said MBCA chairperson Willard Zireva.
MBCA managing director Charity Jinya said the increase in operating expenses resulted from the increase in statutory deposit protection insurance and marketing expenses as the bank sought to increase its visibility to the targeted market segment and also contribute to the betterment of the communities in which it operates.Advertisement
“The quality of loan book remains good. The bank’s loan and advances to customers were US$97,4 million indicating a 10,5 percent increase from the December 31, 2012. Deposits increased by a lower rate of 5,4 percent to US$147,96 million. Consequently, the loans to deposit increased to 66 percent compared to 63 percent as at December 31, 2012,” Jinya said.
Going forward, MBCA expressed optimism of an improved operating environment following the harmonised elections held on July 31.