MBCA Bank, a unit of South Africa’s Nedbank, remains in a firm financial position after posting solid results despite poor economic performance in Zimbabwe.
BUSINESS REPORTER
In its unaudited interim condensed financial results for the half year ended June 30 2014, the bank said it continued to support the country’s industrial sector, with loans and advances growing substantially.
MBCA chairman Willard Zireva said despite the growth in the loan book, the non-performing loan ratio at the end of June this year remained relatively low at 2,65% against an industry average of around 18%, demonstrating the quality of MBCA’s loan book in an extremely challenging economy.
“The bank has positioned itself to take advantage of the limited opportunities that exist in the market through growing the loan book without increasing risk to the bank by targeting quality assets,” Zireva said.
“In spite of economic challenges in the country, the bank has continued to respond positively to the need to provide financing to local industries, demonstrated by a significant increase in loans and advances of 29% from December 2013,” he said.
Keep Reading
- Chamisa under fire over US$120K donation
- Mavhunga puts DeMbare into Chibuku quarterfinals
- Pension funds bet on Cabora Bassa oilfields
- Councils defy govt fire tender directive
The bank’s credit loss ratio stood at 2,62% as at June 2014 in comparison to 2,38% recorded at the end of December last year.
A number of financial institutions in Zimbabwe continue to suffer the effects of non-performing loans as individuals and companies fail to service loans owing to deteriorating economic conditions.
However, the bank’s NPL ratio significantly improved to 2,65% during the period under review as compared to 2,73% recorded as at December 31 2013.
Deposits also grew by 22% owing to investment in opening new branches.
Zireva said the bank maintains a positive view of the future and has positioned itself to take advantage of opportunities that may be available by leveraging on its vast financial network.
“Where these opportunities cannot be funded from our balance sheet, the bank will use the existing lines of credit from regional and international financial institutions namely Afreximbank and (Germany-based) Commerzbank,” he said, adding that the bank’s clients would continue to access direct lending from the Nedbank Group.
The bank said in line with challenges being experienced by various companies in the market, it had recorded a profit after tax of $1,8 million, which was down 11% from $2,1 million reported in the same period last year.
Total income for the period under review declined from $11,9 million to $11,5 million, effectively reflecting declining economic activity which saw a number of companies either downsizing or closing down.