Agribank fully utilises loan facility

sector.
The bank said initial drawdown of the loan facility, which was acquired from the Industrial Development Corporation of South Africa, was done towards the end of May and by August all the funds had been fully disbursed to the clients.
The loan agreement with the IDC stipulated a six-year repayment period including a one-year moratorium on capital repayments.
The loans offered to clients had a 75 percent capital expenditure allocation with the remainder for working capital.
Agribank has generally maintained a high loan to deposit ratio.
For the half year ended June 30, the bank’s loans and advances to customers stood at US$66,7 million up 31 percent and deposits rose 151 percent to at US$81,5 million.
Its loans to deposit ratio for the period under review was 85 percent against an industry average of 75 percent.
This is notwithstanding the fact that the limited lender of last resort function by the Reserve Bank of Zimbabwe has seen most banks being prudent by retaining large balances of liquid assets in cash, especially given that most of bank liabilities are demand deposits.
Generally, Agribank registered an improved performance in terms of its operations, on the back of the increased funding and the resultant increase in earning assets.
The bank achieved total operating income of US$7,9 million during the period, compared to US$4,6 million in the prior period.
Operating costs stood at US$8,2 million.
The resultant loss after tax for the period was US$359 450 compared to a loss after tax in the previous period of US$2,8 million.
“This improved performance is on the back of increased deposits employed to generate more revenue as well as cost management strategies,” commented Agribank chairman Mr Sij Biyam.
In respect of other developments, Agribank opened two new branches during the period under review, namely Kotwa and Boka Agency at the Boka Auction Floors.
This effectively means that the bank’s branch network has increased to 46.
Agribank has also said a technical committee is being set up to spearhead a shareholder restructuring that may result in the coming in of an equity partner through the disposal of a maximum of 49 percent of the bank’s shares.
The bank chairman also said it is ramping up its technological capacities to enhance operational efficiencies.
“In an effort to improve operational efficiencies, service delivery and product offering the bank is currently implementing a system upgrade from Globus G13 to Globus T24.
“Globus T24 is a more robust version which is customer-oriented with a solid browser-based banking solution.
“The project is scheduled for completion by end of year 2011,” said Mr Biyam.