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State owned Agricultural Bank of Zimbabwe Limited failed to return to profitability in the half year ending June, 2014 but managed to narrow its loss to $1,2 million from $3,7 million posted in the same period last year.“The loss was mainly a result of the reduced lending level due to the prevailing liquidity conditions and impairment charges,” said Agribank chairman Sij Biyam in a statement accompanying the group’s financials.
Absence of fresh capital and a dearth in new investments in the economy have compounded Zimbabwe’s liquidity crisis.
In the review period, Agribank’s lending to customers was down to $86 million from $90 million in the comparable period last year.
Mr Biyam said the bank, whose core capital stood at $11,4 million on June 30, recorded a jump in net interest income to $4 million from $2,9 million in 2013.
“The bank saved on interest expenses as there was a decline in lines of credit and interbank deposits which attract high costs compared to the same period last year,” Mr Biyam said.
The Agribank chairman expressed hope that current government efforts to attract foreign direct investment and restore relations with Europe would improve the economic environment.
He said the bank stood to benefit from planned investment programmes in agriculture and disbursement of the $98 million facility which Government is set to receive from Brazil for purchase of agriculture equipment.
“The bank is therefore positioned to profit measurably from the growth of both public and private investment in agriculture,” he said.
Mr Biyam said Agribank was still pursuing a strategic partner to take up 49 percent equity in the bank.
The new partner is expected to inject fresh capital into the institution.
At the close of the period, Agribank’s asset value declined to $118 million from $124 million last year. – New Ziana.
Online Reporter