Agribank finalises US$30m credit line
http://www.theindependent.co.zw/
August 31, 2012 in Business
THE Agricultural Bank of Zimbabwe (Agribank) is finalising negotiations with
the Industrial Development Corporation of South Africa (IDCSA) on a US$30
million fund for possible disbursement as of October this year.
Gamma Mudarikiri
The bank’s director of marketing and business development, Joseph Mverecha,
said the funds were expected to bring relief to cash-strapped sectors of the
economy. Agribank received a similar facility last year which was disbursed
to several productive sectors. About a third of the funds were disbursed to
the agricultural sector and this was expected to be the same this year.
The bank, which is to be privatised according to a cabinet approval of May
2011, intends to maintain its bias towards the agricultural sector.
“There are indications that several investors are taking a long term view of
the economy, the central role of agriculture in the economy and the
strategic role of Agribank at the heart of agriculture and agro-based
manufacturing production value chain. These investors have shown interest
and will get an opportunity to expressly take up equity in the near future,”
said Mverecha.
The privatisation exercise will see government, the sole shareholder,
retaining 51% shareholding after disposing of the remaining stake to a
strategic partner. Mverecha said government had floated a tender for a
financial advisor for the privatisation process.
Privatisation would also help Agribank to meet the new US$100 million
minimum capital requirement as recently stipulated by the Reserve Bank of
Zimbabwe.The bank is currently capitalised at US$13,7 million after
government injected an additional US$1 million early this month.
Agribank this week reported its financial results for the half year ended
June 30 2012, in which it made an after tax loss of US$2,4 million, which
loss it attributed to increased operating expenses. The bank had over the
past year invested US$2,7 million in ICT upgrade and branch connectivity,
which increased operating costs and resulted in the loss.
The bank said it had put in motion a process for comprehensive review of all
operating costs and was implementing a cost containment programme that would
yield visible gains to the bottom line in December this year.
Revenue in the period under review grew slightly to US$9,2 million compared
to US$8,7 million in the comparative period last year. The bank’s total
asset base increased by 7% to US$110,2 million while deposits grew by 13% to
US$78,2 million. Mverecha said interest income constituted 40% of revenue.
Mverecha said although the bank was pursuing cost cutting and control
measures, it was not considering any retrenchments and would continue
exploring new revenue lines through new product offerings and strategic
partnerships.