MBCA Bank recorded a surge in operating income in the first six months of the year driven by funded and non funded income.
Total operating income up to June was $8 626 724 compared to $6 730 035 over the same period last year. In a statement accompanying the banks, interim financial results for the period ended June 30, MBCA chairman Willard Zireva said equity stood at $16 743 331 above the regulatory requirement of $12,5 million.
“The resultant profit after tax for the period was $468 213 compared to a loss after tax in the previous period of $424 337,” said Zireva.
“The cost to income ratio improved from 110% recorded over the same period last year to 93% mainly due to growth in revenue.”
Balances with banks and cash contributed 43% to total assets, followed by loans and advances which contributed 42%.
During the period under review the bank provided loans to local companies of almost $30 million which were funded by parent company, Nedbank group.
Its half yearly interim results showed that bank total assets size declined by 9% December 2010 as a result of a $16 959 622 loan due to government institutions that were retired.
The bank’s loan to deposit ratio stood at 52% at the end of June down from 61% as at December 2010.
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“The provision for impairment of loans and advances as at June 30 2011 improved to an equivalent of 2,9% of the lending book from 5% as at December 31 2010. The improvement was mainly due to recoveries made during the year non-performing loans and booking of quality assets in 2011.”
Zireva said liquidity constraints and lack of affordable long-term credit lines were expected to continue to adversely impact the banking sector adding the bank was not immune to challenging environment.
During the last six months MBCA undertook the second phase of staff rationalisation that will result in an additional 52 employees being retrenched.