AfrAsia Kingdom posts $3m profit

HARARE - Afrasia Kingdom Zimbabwe Limited (AfrAsia) registered a $3,3 million profit after tax in the full year to December 31, 2012, compared to $0,8 million recorded in prior comparable period.

The diversified financial services group’s performance come on the back of an illiquid market as Zimbabwe is struggling to unlock lines of credit from international finance institutions due to the country’s high risk status.

Sibusisiwe Bango, AfrAsia group chairperson said liquidity and funding remained a key area of focus for the group during the period under review.

“The liquidity position continued to be stable thanks to the group’s conservative and forward looking funding strategy. The combination of a clear focus on the right sizing of the statement of financial position, continued growth of customer deposit base and strategic access to offshore financial markets enabled the group to strengthen its funding base,” she said.

The group’s total assets for the 12 months to December stood at $201 million, showing an increase of 28 percent from the December 31, 2011 figure of $157 million.

“The growth in asset base was largely attributed to significant increase in cash resources and growth in the loan book,” said Bango.

AfrAsia changed its financial year-end from December 31 to June 30 to synchronise it with that of AfrAsia Bank Limited after shareholders had consented to the changes at an extraordinary general meeting last December.

To comply with the change in the financial year-end, said Bango, the group will publish its audited results for the 18 months ending June 30, 2013 in September 2013.

Bango said during the period under review, all business units were all adequately capitalised, except for Kingdom Stockbrokers (Private) Limited (KSB).

“Post the reporting date, the board resolved not to renew the trading licence for KSB,” said Bango.

In a statement released earlier, AfrAsia noted that the non-renewal of the stockbroking licence has been done as a deliberate strategic move after a careful assessment of the operating environment, and is in line with the group’s objective of maximisation of shareholders value.

Bango, however said that the shareholders of the group are committed to achieving the required minimum capital for the remaining business units in compliance with the regulations. Operating expenses increased by 19 percent owing to the system upgrade of the core banking system and investment in human resources required to grow the business.

On the performance the group’s subsidiaries, Kingdom Bank Limited, the group’s flagship banking unit achieved the regulatory capital of $25 million required by December 31, 2012.

Bango noted that the bank also successfully upgraded its core banking system in line with the customer service delivery strategy.

The upgraded system and a sound capital position enabled the bank to attract and retain more customer deposits, both in the wholesale and retail markets.

“The bank closed the period with surplus liquidity with a profit after taxation for the period under review of $1 million compared to the prior period loss after taxation of $1,6 million,” she said.

The performance of Kingdom Asset Management continued to improve with the business posting a profit after taxation of $161 823, a 22 percent increase from prior period profit of $132 172. - Business Writer

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