Zamco acquires close to half a billion in NPLs

THE Zimbabwe Asset Management Company (Zamco) has acquired close to half a billion dollars in non-performing loans (NPL) as at May 31 this year, as it moves to clean bank balance sheets.

Source: Zamco acquires close to half a billion in NPLs – NewsDay Zimbabwe June 30, 2016


In an interview, Zamco chief executive officer, Bart Mswaka, said the asset management company concluded the first phase of NPL acquisitions that focused on the top 100 NPLs across the banking sector.

“As at May 31, 2016, Zamco had acquired NPLs amounting to $498 million. The acquired NPLs are spread across a number of banking institutions. Zamco is currently evaluating non-performing loans offered by banks in the second phase of NPL acquisition. Thus, verifications are currently underway. This phase is expected to be completed before the end of the third quarter,” he said.

Mswaka said following the acquisition of the $498 million NPLs, the ratio of non-performing loans was now at 10,8%, half the 20,14% recorded in September 2014.

“Performance, in relation to the second objective of resolving the acquired NPLs, can only be evaluated at the conclusion of the resolution stage. However, at this stage it is important to highlight that a number of companies are benefiting from the relief brought about by the restructuring of the loans, namely reduction in interest rates, longer repayment periods and in some cases repayment holidays,” he said.

The central bank targets to have a NPLs ratio of 5% by the end of this year.

Various local banking institutions have benefitted from the special purpose vehicle, set up by the central bank last year to resolve NPLs, which haunted the banking sector.

So far, many banks have managed to get their NPLs aquired by Zamco. NPLs in the banking sector have resulted in a credit crunch, with the banking sector no longer lending to the economy. The rise in NPLs resulted in the decline in lending to various sectors of the economy as banks became conservative.