HomeBusiness DigestGetbucks posts ZW$17m profit

Getbucks posts ZW$17m profit

DEPOSIT-TAKING micro-finance entity Getbucks says profit after tax for the quarter ending March 31, 2020, was ZW$17,1 million, but raised concern over the twin perils of hyper-inflation and Covid-19.


“The Zimbabwean economy continued to face a myriad of challenges comprised of significant readjustments, which include re-introduction of the local currency in 2019. Liquidity has remained constrained. Hyperinflation and the Covid-19 pandemic have created rising uncertainty,” the company’s chief finance officer, Patrick Mashonganyika, said in a trading update.

Borrowings during the period decreased marginally to ZW$49 million in March 2020 from ZW$54,5 million last year. “Customer deposits increased by 51% to ZW$22,3 million (December 2019: ZW$14,7 million). This is attributed to a growing customer base and interbank rate movement, which increased the Zimbabwe dollar equivalent of foreign currency-denominated deposits,” Mashonganyika said.

Shareholders’ equity increased from ZW$57,6 million to ZW$74,7 million owing to normal trading profits and the impact of fair value gains on investment property and foreign currency-denominated balances. The micro-finance institution said value preservation strategy to acquire investment property in prior year continued to yield results as fair value gains contributed ZW$8,4 million to the bottom line. Mashonganyika said the cost-to-income ratio for the quarter was 69%, driven by a higher fair value adjustment in the period, thereby increasing income. Measures are already being implemented to rationalise the balance between cost and income.

“During the period under review the Bank’s performance was below forecast mainly as a result of accelerated increase in operating costs as service providers attempt to price the value of services to the United States dollar. Measures have been put in place to protect shareholder investment through utilisation of the Bank’s capital preservation strategy and cost containment measures,” Mashonganyika said.

Getbucks forecasts an expansion in lending to the productive sector, as well as an increase in depositor base by utilising its innovative technology platforms. The company is, however, cognisant of the inherent change in credit risk profile for small- and medium-sized enterprises with a higher risk of impairment as a result of the Covid-19 pandemic. Getbucks said it adhered to Statutory Instrument 83 of 2020 by closing most branches across the country and only offering essential services as stipulated by Reserve Bank of Zimbabwe guidelines during the Covid-19 lockdown period. The financial institution continues to offer its services via digital platforms. No dividend was declared during the period under review, as Getbucks sought to reinvest cash into the business.

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