Agribank records $9,2M loss, banks on privatisation to recover

via Agribank records $9,2 mln loss, banks on privatisation to recover | The Source  March 28, 2014

The government-owned Agricultural Development Bank of Zimbabwe (Agribank) has posted a $9,2 million loss for the year ended December 31,  2013 compared to $5,6 million due to increased non-performing loans.

Chief executive Sam Malaba told journalists on Friday that the bank hopes to rebound on privatisation but is still waiting for government to identify a suitable partner.

“Privatisation is part of the measures for the capitalisation of the bank,” Malaba said.

“To date the financial and legal advisors have completed the due diligence and are now finalising the valuation of the bank, subsequent to which the bank will go for selective tender.”

Agribank has so far received $4 million from Treasury, but requires at least $50 million to recapitalise.

Malaba said of that $9,2 million loss, $5,8 million was from impairment expenses, up from $3,8 million in 2012.

“If we hadn’t had impairment expenses our loss would have come down,” he said.

At $12,5 million, the bank remains severely undercapitalised against a minimum regulatory requirement of $25 million, a major constraint on its operations, Malaba said.

“Inadequate capitalisation of the bank results in funding and liquidity challenges and the inability to underwrite business growth. It also means having to make recourse to expensive market fixed deposits and the inability to attract significant deposits,” he said.

He said the impairment provisions was also a reflection of what was happening within the economy, with company closures increasing.

“It is basically made up of three large corporate entities who are holding 62 percent of the impairment total,” Malaba said.

“Going forward we have now adopted a very aggressive debt management recovery strategy to reduce our non-performing loans, whereby we are now expanding and intensifying our pre-loan assessments, strengthening credit granting processes and we now want  to ensure that we perfect the security provisions before loan granting.”

He said the bank would also focus on post disbursement monitoring to see how money was utilised and to ensure stop-orders are in place for repayments.

The bank would also proactively manage the repayment plans.

Net interest income stood at $6,9 million up from $5,3 million in 2012. Total operating income fell slightly to 19,1 million in 2013 from $19.9 million in 2012.

Operating expenses increased by 1.8 percent to $22.7 million after bank implemented stringent cost containment measures.

The bank is setting up a micro finance division to support small and medium enterprises, particularly those in the agriculture, mining and retail distribution. The division will be operational in May this year, Malaba said.


  • comment-avatar
    roving ambassador. 10 years ago

    Flogging a dead horse. With all the Zanu borrowers in you books,do not expect to recover anything. Only a fool would by into any of these banks.

  • comment-avatar
    Jenandebvu 10 years ago

    Surprised why Malaba would expect the government to select an appropriate partner for his bank. Sounds like a confession to me that there are forces pulling the string rather than him as the CEO or perhaps you are saying the loss of $9,2 cannot be attributed to you, there is a “pupperty master” behind the scene.

    If all banks appear to be under capitalised, why then did the government through it Dr Charity close the Oil or is it Fuel Bank for being undercapitalised? No wonder why Dr Charity could not be confirmed a substantive of the federal central bank. She has a problem manning multiple currency. Lolo

  • comment-avatar
    jobolinko 10 years ago

    They waiting for someone to come foward, not selecting a partner there are just no takers

  • comment-avatar
    Mlimo 10 years ago

    Banking on dead banking good one go figure