Agribank seeks fresh capital

HARARE - State-owned financial institution Agricultural Bank of Zimbabwe (Agribank) is negotiating for $48 million in fresh capital with government to recapitalise the business.

The bank’s chief executive officer — Sam Malaba — said the bank, whose core mandate is to fund the country’s agriculture sector, was courting strategic partners to raise funds to recapitalise the financial institution.

“The bank is engaging the shareholder (government) in pursuance of further capitalisation and we are also talking to potential strategic partners. The bank’s core capital is standing at about $52 million. We appreciate the continuing support from the shareholder in terms of capitalisation of the bank.  Government has recapitalised the bank to the tune of $40 million so far. But for us to fully support the agriculture sector and optimise on business growth prospects, it is important that the bank be further capitalised with a further $48 million,” said Malaba.

In its financial results for the six months to June  this year, which were released this week, Agribank, recorded a marginal one percent  increase in net profit to $2,18 from $2,16 million  registered in the same period last year.

The bank attributed the growth to the re-organisation of the bank, investment in upgrading information communications technology as well as implementation of a wide range of the bank’s business growth strategies and initiatives.

Malaba said the growth was also due to positive benefits from transferring non-performing loans to Zimbabwe Asset Management Corporation (Zamco).

Net interest income increased by 14,2 percent  in the period under review to $13 million from $11,42 million recorded in the first half of the previous year.

Commission income went up by four percent to $2,3 million during the period under review  compared to $2,2 million  recorded in the same period in 2016.

Total operating expenses surged 5,2 percent to $11,45 million  in the first half of this year from $10,88 million recorded in the same period in the previous year.

The bank recorded impairment charges of $3,34 million during the period under review from $891 000 recorded in the same period in 2016.

Loans and advances declined by 19 percent to $80,28 million during the period under review from $99 million in the same period the previous year, due to transfer of $17 million worth of loans to Zamco that outweighs growth in new loans.

Total assets grew by five percent to $214,99 million during the period under review from $204 million recorded in 2016.

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