Getbucks Bank bullish about 2022 prospects

Source: Getbucks Bank bullish about 2022 prospects | The Herald

Michael Tome Business Reporter

GETBUCKS Bank says prospects for the 2022 financial year remain bright as the financial services provider continues to pin hopes on the anticipated recapitalisation of its operations in the second quarter of the year.

Earlier this year the microfinance bank said it would undertake a rights issue as part of its capital raise initiative in order to meet the US$5 million minimum capital requirement set by the Reserve Bank of Zimbabwe (RBZ).

As per RBZ thresholds, tier 3 deposit-taking microfinance banks are mandated to have US$5 million minimum capital while Tter 1 banks, large indigenous commercial banks and all foreign banks are required to have US$30 million minimum capital.

Tier 2 commercial banks, merchant banks, building societies, development banks, finance, and discount houses are expected to have a US$20 million minimum capital.

In November 2021, GetBucks engaged the RBZ for an extension of the regulatory minimum capital requirement deadline by year-end (2021) saying it was unlikely to meet the set timeline.

Getbucks said recapitalisation would help the financial services firm address the regulatory minimum capital requirement of US$5 million equivalent and enable it to underwrite more business.

This comes at a time when the bank posted a $40 million after-tax-loss in the first quarter to March 2022 compared to a $21 million profit after tax registered in the prior year which Getbucks attributed mainly to rising operational costs.

In inflation-adjusted terms, the firm’s loan book contracted by 10 percent to $226 million from $252 million realised in the first quarter of last year.

According to Getbucks the loan book, “was affected by changes in the civil servants’ remuneration structure.”

Total income grew by 48 percent to close the first quarter at $165 million in inflation-adjusted terms compared to $111 million in the first quarter of 2021 attributable to increased transaction volumes.

“The Microfinance Bank’s prospects remain positive with the anticipated recapitalization of the institution expected in the 2nd quarter of 2022. The recapitalisation will see the Institution underwrite more business,” said Getbucks in its quarterly update.

In the course of the period under review, the microfinance bank’s equity surged 82 percent to close the quarter valued at $470 million.

Reserve Bank of Zimbabwe Governor, Dr John Mangudya in his 2022 Monetary Policy Statement pronouncements said 18 operating banking institutions, excluding POSB with no minimum statutory requirement.

Thirteen banks complied with the new minimum capital requirement last for their chosen capital tier segment. Getbucks Microfinance Bank Ltd is a Zimbabwe-based financial service company with operating divisions that include consumer lending which provides individual public sector consumer loans.

Small and medium enterprise (SME) Lending segment provides loans and other credit facilities for corporate clients.