MBCA Bank recorded a 33% increase in profit after tax to $5,4 million in the year ended December 31 2014 attributed to a rise in net interest income.
BY VICTORIA MTOMBA
Net interest income is the difference between interest earned and interest paid and is commonly tracked by banks and other institutions that lend money. Profit after tax for MBCA grew from the 2013 figure of $4 million.
“This increase was attributable to $2,222 million growth in net interest income on the back on increased lending to our customers. The bank’s total income grew from $22,617 million to $25,5 million representing a 13% increase from the prior year,” MBCA managing director Charity Jinya said in a statement accompanying the group’s financial results.
The group’s operating expenses grew at a lower rate at 7,4% resulting in an increase in profit.
The balance sheet for the group stood at $188,936 million from $179,689 million due to repayments from major customers in the period under review.
Loans and advances constituted 49% of the total balance sheet compared to the same period 2013. Loans deposit ratio increase to 67% from 59% in 2013.
The bank’s wholesale division contributed 40% to total operating income during the period under review; retail banking contributed 38% to total operating income. The money market activities were subdued during the period under review due to the absence of lender of last resort and limited access to regional and international credit lines.
“Despite this, the division contributed 20% to the bank’s total operating income up from 19% contributed in the year ended December 31 2013,”the company said.
Jinya said the bank will continue to build a sustainable base of operations.
“The bank is working on initiatives to improve funding for medium term and vehicle asset finance products.In addition a mortgage product will be rolled in the first half of 2015,” Jinya said.
She said the operating environment continues to be challenging due to low investment inflows, lack of competitiveness and low levels of productivity.
Jinya said the bank’s indigenisation plan has been approved by the ministry of Indigenisation and implementation will start during the course of 2015.