REGIONAL financial institution, Banc ABC, plans to spend US$1,5 million towards the establishment of a mobile banking platform expected to be operational by end of June this year, a company official said.
Banc ABC group chief operating officer Ronald Pfende told businessdigest in an interview this week that the system will be central and used by all the branches across the five countries in which the bank operates in the region.
“The investment is on technology and will be made between now and June of this year,” said Pfende.
“Unlike mobile money, this is mobile banking and will be an internal facility that does not require us to make use of the different mobile phone providers in all the countries in which we operate in.”
Pfende said the mobile banking platform is expected to improve the bank’s product offering with a view to change transactionability for the better. He said it would allow customers to perform all transactions such as card payments, balance enquiry and other value added services as part of the company’s growth strategy. Apart from the mobile banking investment, BancABC has secured US$100 million funding from 98,7% shareholder Atlas Mara Limited (Atma).
The London Stock Exchange-listed Atma acquired 98,7% of the bank last year.
“The major benefits of this transaction include access to more funding, management depth and a stronger technology platform,” said the group in a statement, adding it has another US$130 million in lines of credit from various lending institutions.
The group has already closed a €65 million funding arrangement with the European investment bank and tied another US$50 million loan facility with the African development bank for on-lending to Small to Medium Enterprises and small corporates. BancAbc also secured a US$7,5 million world business capital provision to Zambia to support the increasing demand in the country for SME lending.
In a results presentation, acting group CEO Blessing Mudavanhu said the group reported an attributable loss of BWP438 million for the year ended 31 December 2014 compared to a profit of BWP198 million prior year largely due to impairments, reduced margins and increased operating expenses.
“The bulk of credit impairments charges incurred during 2014 were, however, primarily once off and should be seen as part of the group’s conservative approach towards managing credit risk,” said Mudavanhu.
He said customer deposits increased by 165% and the extra funding was deployed costly into liquid assets and a lesser extent loans and advances.
In terms of operations, Zimbabwe reported a US$1,5 million loss, from a US$14,2 million profit in the prior year after a 222% growth in credit impairments to US$29, 9 million.
The company said Zimbabwe had a significant contribution to the group’s non-performing loans (NPLs).
In an interview, Mudavanhu said Tanzania led the portion of NPLs due to its policy environment that makes it difficult to collect bad debts.
He said going forward, the group was changing the banking model for Tanzania to be more transaction-based as opposed to pushing loans and advances.