METBANK has recorded a loss of $1,8 million for the year ended December 2013 due to the increase in non-performing loans.
By Tarisai Mandizha Business Reporter
In 2012 the bank recorded a profit of $1,6 million.
In a statement accompanying the bank’s audited financial statements, Metbank chairperson Wilson Manase said the performance of the loan book was not impressive and continued to weigh down the bank’s overall performance.
Manase said as a result of the downgrading of accounts, non-performing loans as a percentage of loan books worsened to 43% from 29% in 2012. Consequently, provisions for doubtful debts increased by $4,1 million to $8,5 million in 2013 from $4,4 million in 2012.
“We have taken pre-emptive action to reshape the frequency of risk monitoring and stress testing in anticipation of continued deteriorating credit conditions,” Manase said
In the period under review, net interest income increased to $13,9 million from $10,9 million in 2012, operating income declined to $23,1 million from $23,4 million in 2012 while impairment losses on advances grew to $4,1 million from $3,6 million in 2012.
Manase said during the course of the year the bank encountered liquidity challenges on account of the dominance of liquid capital in the form of properties on its balance sheet.
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He, however, said considering the tight liquidity in the market and lack of interest of foreign investors in local assets, converting the investment properties into cash remained a big challenge.
Manase said last year the bank was issued with a mortgage banking licence as a result of the expanded product offering and the bank was at an advanced stage of sourcing funds with an appropriate tenor and pricing to support this new line of business.
He added that the banking sector was encouraged by the recent move by the Ministry of Finance aimed at improving the liquidity situation in the money market, which includes the establishment of the $100 million Africa Export and Import Bank (Afrexim) interbank facility and the restoration of the Reserve Bank of Zimbabwe as the lender of last resort.
“We believe the downward spiral in prices of goods is occasioned by the low liquidity levels in the market and low disposal incomes, accentuated by increased company closures,” he said
