Agribank turns the corner, posts $4,8 million profit

AGRIBANK has recorded a profit of $4,8 million for the year ended December 2016, from a loss position of $6,3m in 2015 on the back of a growth of net interest income.

BY TARISAI MANDIZHA

Agribank chief executive officer, Sam Malaba (right) presents the bank’s financial statement for the year ending 2016 to the media, with the bank’s marketing and corporate communications manager, Olam Marufu paying attention in Harare yesterday
Agribank chief executive officer, Sam Malaba (right) presents the bank’s financial statement for the year ending 2016 to the media, with the bank’s marketing and corporate communications manager, Olam Marufu paying attention in Harare yesterday

Net interest income for the year grew by 45,2% to $25,9m from $17,8m in 2015.

Agribank chief executive officer, Sam Malaba said positive performance marked an indication of the solid turnaround for the bank premised on the implementation of a range of turnaround initiatives following the capitalisation of the bank in 2015.

He said the capitalisation of the bank amounting to $30m in May 2015 and a further $10m in 2016 enabled the bank to implement staff rationalisation and underwrite new business, leading to growth of income earning assets.

Malaba added that government further injected $10m into the bank in December 2016 to support various on-going ICT upgrade initiatives necessary for compliance with Anti Money Laundering regulatory requirements.

“The bank has turned around and is on a growth trajectory buoyed by the positive outcome of the business growth initiatives implemented post realignment as well as injection of capital by shareholder,” he said.

“The bank is poised for growth driven by ICT-based products mobile and agency banking business as well as sustained deployment in agriculture in support of agriculture recovery food self-sufficiency and growth.”

In the period under review, the bank’s non-interest income was flat at $5,3m due to the implementation of e-banking channels in the second half of the year.

Measured cost containment strategies resulted in the bank recording a 14,5% decline in operating costs to $22,3m, compared to $26m in the prior period.

Malaba said the agricultural bank continued to benefit from the staff rationalisation exercise completed in 2015 with a staff-to-income ratio closing the year at 30,8%, compared to 57,7% in 2015.

“The bank continued to benefit from the staff rationalisation that was completed in 2015, where the bank reduced its staff compliment by 20%. This restructuring let to cost savings of $1,7 million for the year under review,” he said.

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