Staff Writer

Agribank’s net profit for the first five months to May this year amounted to ZWL$308 million which was way above budget backed by significant growth in loan book.

The cost to income ratio for the year to date including revaluation profits and losses was 59% compared to a budget of 73% whilst the staff cost to income ratio for the year to date including revaluation profits was 27% against budget of 36%.

Tier 1 capital closed the period under review at ZWL$922.97 million and total assets at ZWL$11.38 billion. 

Gross loans and advances were ZWL$4.13 billion as at 31 May 2021 was about 100% above the December 2020 position. 

The loan to deposit ratio was 67.4% against a budget of 49.1% and compared to 31 December 2020 industry average of 39.5% as per the Reserve Bank of Zimbabwe (RBZ) Monetary Policy Statement of February 2021. The Agriculture book represented about 55% of the total book. The bank, in line with its strategy to grow the export book, had an export book of USD7.5 million compared to less than USD2 million as at December 2020.

Non-performing loan (NPL) ratio stood at 0.85% due to growth in the loan book and recovery initiatives. The industry average NPL ratio as at 31 December 2020 was 0.3% as per RBZ Monetary Policy Statement of February 2021.

Customer deposits were ZWL$6.13 billion increasing by 29% from 30 April 2021. The Bank closed the period with a liquidity ratio of 64%, which was well above the RBZ minimum liquidity requirement of 30%.

The industry average liquidity ratio was 73.1% as at 31 December 2020, as per RBZ Monetary Policy Statement of February 2021.

“The improvement in liquidity is attributed to increased deposits, agro bills funding and capitalisation of the Bank,” said Elfas Chimbera, acting chief executive officer of Agribank.

In April this year, President Mnangagwa officially launched the AFC Holdings and its subsidiaries.

The Launch followed the completion of Agribank restructuring and remodeling into a Land Bank. The AFC Holdings has the following subsidiaries AFC Commercial Bank (formerly Agribank); AFC Land and Development Bank of Zimbabwe; AFC Leasing Company; and AFC Insurance Company.

The AFC Holdings and its subsidiaries will be a One Stop Banking and Financial Services House, providing all banking, insurance, leasing and agricultural financing, with special focus on Agriculture.

Chimbera said this will require a rebranding exercise to adopt the AFC Holdings logos and corporate colours. 

“The Bank is developing a detailed schedule on the rebranding exercise which will help to prioritise and sequence the activities for high impact and cost minimization.”

The Foreign currency auction system continues to bring reprieve to industry whose risk and costs of acquiring foreign currency are now being contained, he added – Harare

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