HARARE - MBCA Bank (MBCA) — a unit of South Africa’s Nedbank group — says ithopes for a positive outcome on its indigenisation compliance discussions with government, as the financial institution seeks to comply with the country’s laws.
In a statement accompanying the group’s unaudited interim condensed financial results for the half year ended June 30 2014, Willard Zireva, MBCA chairman said all processes for the
institution’s indigenisation were on course.
“The bank’s indigenisation plan was acknowledged by government and management is currently finalising the operational modalities prior to implementation,” Zireva said.
The indigenisation policy, which was enacted in 2008, compels foreign firms to cede majority shareholding to black Zimbabweans.
However, there has been confusion over the implementation of the policy as various government officials have been interpreting the policy differently – resulting in most companies delaying to comply with the Act.
The Bankers Association of Zimbabwe (Baz) recently revealed that foreign banks were yet to comply with Zimbabwe’s indigenisation policy due to authorities’ postponement in approving their compliance plans.
This is despite government’s pressure for the institutions to conform to the law compelling foreigners to cede majority shareholding to black locals — with former empowerment
minister Savior Kasukuwere having given them several ultimatums.
According to Baz, there are 21 banks operating in the country, 16 indigenous and five foreign-owned. The foreign banks include Barclays, Standard Chartered, Stanbic, AfrAsia and MBCA.
Meanwhile, MBCA recorded a 11 percent decline in profit in the six months to June from $2,1 million registered in the prior period due to an increase in employee costs on the backdrop of flat-lining interest income.
Interest income for the period stood at $7,8 million from $7,9 million in prior comparative period. Loans and advances were up 29 percent to $100 million.
Deposits also grew to $160 million from $131 million, the bank said. Employee costs rose to $5,1 million from $4,6 million while interest expense declined to $2,1 million from $2,3 million.
Zireva noted that despite the growth in the loan book, the non-performing loan ratio as at June 30, 2014 remained relatively low at 2,65 percent against an industry average of around
18 percent, demonstrating the quality of the group’s loan book in an extremely challenging economy.
The loan to deposit ratio increased to 63 percent compared to 59 percent reported, as at December 2013.