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Barclays to grow its loan book

Barclays Bank Zimbabwe Ltd (Barclays) has announced plans to grow its loan book significantly in 2014 after receiving US$40 million in offshore funding from from its parent company, Barclays Bank Plc, management said.

Taurai Mangudhla

The US$40 million comes as the financial institution rolls out a plan that involves increasing its risk appetite but within the confines of its safe banking model, MD George Guvamatanga said at the company’s 2013 annual results briefing held in the capital earlier this week.

“We want to grow our loan book significantly and introduce more debt products leveraging on our capacity from Barclays Plc,” Guvamatanga said.

To reduce lending risk, at a time non performing loans in the market average 16%, Guvamatanga said Barclays was lending to multinationals and companies listed on the Zimbabwe Stock Exchange ZSE.

“On the individual loans, we are also lending to employees of these companies because we understand their cash flows better because they are audited,” he said.

“As I have said to my colleagues, a pay slip is an intention to pay just like an invoice so if you want to give a loan based on a pay slip then you need to understand the issuer of that pay slip or invoice in the case of some who have orders with these companies.”

Guvamatanga said before corporate loans are approved, a thorough vetting process is conducted in respect of whether or not the business model is viable and management’s capacity to deliver.

Barclays chairman Antony Mandiwanza said going forward the bank would continue its drive to grow.

“As a member of the Barclays group, there will be increased leverage of Barclay’s global capabilities in lending products, technology and channel initiatives,” Mandiwanza said.

Loans grew by 42% over the five years to US$115,3 million at the end of 2013.

In the year under review, the group’s loan book grew by 26% as more loans were advanced to individuals and businesses across most sectors of the economy. In terms of financial performance, the bank registered a 43% growth in after tax profit to US$3,0 million up from US$2,1 million prior year.

Total income grew 5,3% to US$38,8 million slowed down by the effect of capped charges and commissions, Mandiwanza said in a statement. Barclays chief finance officer Samuel Matsekete said net interest income went up 61% to US$12,3 million from US$7, 6 million, reflecting growth in the company’s loan book.

Earnings per share stood at US0,14 cents for the year from US0,10 cents per share in 2012.

Matsekete said non-funded income went down 9% to US$27,9 million.Operating expenses for the group remained flat at US$33,9 million.

Deposits also grew slightly from US$225m in 2012 to US$248m in 2013.

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