“The bank is currently negotiating with IDCSA for a second tranche of US$30 million, which is expected to be disbursed during the second quarter of 2012,” said Agribank chairman Sijabuliso Biyam in a statement accompanying the financial results.
Agribank received US$30 million form IDCSA in 2011 to support local companies increase manufacturing capacity, preserve jobs and increase local goods on the market.
“Through the IDCSA facility, the bank was able to support companies in agriculture and manufacturing; key sectors underpinning economic recovery,” said Biyam.
The bank said the second tranche would still target the same customer criteria and has a tenure of six years at concessional interest rates. In the second tranche, a total of US$5 million would fund companies involved in green projects, which contribute towards reduction in dependence on fossil fuels and energy.
The bank recorded a loss after tax of US$286 409 from a loss position of US$8,1 million in 2010. Agribank said the improved performance in 2011 partly reflected the positive impact of the first tranche of US$30 million which was disbursed in 2011.
Operating income increased by 82% to US$19,3 million helped by a 216% jump in interest income to US$8,9 million as the bank’s lending activities increased on the back of IDCSA lines of credit.
Non-interest income totaled US$15,48 million buoyed by net fees and commission income of US$13,2 million. The bank managed to contain its operating costs to US$19,3 million increasing by only 6% from the prior year.
“The moderate increase in costs in 2011 reflects heightened cost control measures implemented by the bank,” said Biyam. Customer deposits marginally increased to US$38,4 million but the line of credit from IDCSA increased the bank’s loans and advances to US$72,6 million during the financial year giving a loan to deposit ratio of 105% above the central bank recommended average of 70%.
Non-performing loans totaled US$2,8 million, decreasing from US$5,7 million last year. Agribank provided for US$906 743 in loan impairments, sighting that its loan book was of good quality.
“The quality of our loan book is good and with non-performing loans just under 4%,” said Biyam. The balance sheet of the bank grew significantly by 67% to US$102,8 million and the bank is adequately capitalised at US$15,1 million well above the regulatory minimum requirement of US$12,5 million for a commercial bank.
With a capital injection of US$20 million by the major shareholder,which is government, in 2009, the sole shareholder has approved the bank’s privatisation plan, where a strategic partner would acquire 49% equity with government retaining 51%.
Government through the State Procurement Board has already invited advisors to spearhead the restructuring of the bank and the tender closed this week. It was also indicated that the bank was considering an initial public offer on the Zimbabwe Stock Exchange.