METBANK posted a $0,29 million after-tax profit in the half-year ended June 30 from a loss-making position in the comparable period last year driven by austerity cost cutting and containment measures.
BY BUSINESS REPORTER
In the same period last year, the bank posted a loss of $0,17m.
In a statement accompanying the bank’s interim financial results, board chairman Wilson Manase said cost cutting and containment measures resulted in a 20% drop in operating expenses.
“The bank continued to pursue an austerity cost-cutting and containment measures, which saw a 20% downward movement in operating expenses from $5,6m during the half-year ended June 30 2015 from $4,5m during the half year ended June 30 2016,” he said.
Interest expenses raced to $4,1m during the period under review from $2,1m in the comparable period last year due to additional interest on long term debt instruments, Manase said.
The bank’s loan book declined to $13,2m in the period under review from $28,6m as at June 30 last year, as it cut back on-lending to stem the rising defaults, which had afflicted the financial sector.
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“The bank continued to pursue a hybrid of loan recoveries and new business generation, particularly with corporates showing capacity to recover from the current challenging economic environment,” Manase said.
In the period under review, MetBank completed a restructuring exercise, resulting in the conversion of current liabilities amounting to $5,1m into equity.
The move, Manase said, resulted in an increase in the bank’s core capital to $37,67m in the period under review from $32m in the same period last year. The minimum core capital is $25m.
Manase said the bank was on course to meet the $100m minimum core capital threshold by 2020.
In 2014, central bank governor John Mangudya said top-tier banks should have a minimum capital of $100m by 2020 to be able to offer a wide range of services.
