BancABC Zimbabwe, the local banking subsidiary of Atlas Mara, reported on Wednesday in its financial statement a $0.45 million loss in the 14-month period ended 28 February 2021.
This compared to a $7.8 million for the 12-month period ended December 2019.
The continuing and uncertain effects of the Covid-19 pandemic have clouded the outlook for many economies. Banks have responded to calls of supporting the local economy despite the challenging operating environment which is characterised by policy inconsistencies, currency depreciation among other issues.
According to the bank’s parent company, the numbers have been impacted by an increase in loss on net monetary position of $5.8 million compared to corresponding period due to hyperinflation.
“Performance was impacted by an increase in loss on net monetary position as well as increased operating costs due to hyperinflationary pressures and currency depreciation,” it said.
As part of balance sheet management, BancABC Zimbabwe invested in inflation and exchange rate hedging assets, which resulted in net asset value increasing to $60.7 million for February 2021 compared to $53.6 million for December 2019.
“The group’s performance for the period was negatively impacted by the restrictions on business activity in each of our markets as a result of lockdowns, travel restrictions, and entire sectors of the economy being closed as “non-essential” during the height of the pandemic.”
Foreign exchange markets were similarly impacted, with greater than 20% declines against the dollar in the quarter for local currencies in countries such as Zambia, Zimbabwe, and South Africa. The major currency depreciations across the African markets in which Atlas Mara operates resulted in a more than $145 million reduction in the US dollar value of the company’s assets and thus a reduction in the company’s debt capacity.
Excluding IFRS 5 remeasurement loss of $1.4 million, the group recorded a loss of $57.3 million for the 14-month period ended 28 February 2021. Performance of the group was also negatively impacted by additional losses arising from write-off of deferred tax assets of $10.9 million, additional fair value loss of $2.8 million arising on the revaluation of its financial assets measured at FVTPL as well as $6.1 million net monetary loss based on hyperinflation accounting in Zimbabwe.
Excluding the impact of these additional losses and that of IFRS 5 remeasurement loss, the reported loss for the 14-month period ended 28 February 2021 remained flat at $37.6 million.
Term deposits remained the highest contributor to deposits, making up 58.2% of total deposits as at the end of February 2021 from 72% as at 31 December 2019.
“There was an increase in overnight deposits/interbank borrowings reflecting the tight liquidity situation experienced in Botswana and Zimbabwe,” it said.
Here are some of the major performance highlights of BancABC Zimbabwe
– Digital income contributed 9% to core revenue, a substantial increase from 2019.
– A 348% surge in Visa card holders from 7.5K as at February 2020 to 33.8K as at February 2021.
– 11% increase between December 2020 (30.5k) and February 2021 (33.8 thousand).
– A 33% rise in mobile banking subscribers from 107K in February 2020 to 164K in February 2021.
– A 63% and 424% increase in mobile transaction volumes and values ($3.7 million vs. $2.3 million) respectively.
– The Bank NPL ratio improved to 1.35% as at February 2021 from 3.10% in February 2020.
– Entered into partnership to open total of 28 kiosks which are a low-cost substitute to branches.
– Launched the local remittance service in September 2020, $2 million sent through the service between September 2020 and February 2021.
– Launched the A360 mobile app in July, 33 thousand registrations by December 2020 and 45 thousand registrations by February 2021.
– Added QR code payment functionality on the A360 mobile app.
– Optimized KYC account opening through the website launched in October 2020