BancABC seeks partner

further capitalise its operations in Zimbabwe and Tanzania.
Reporting its financials for six months ended June 30, 2011, BancABC said while capital adequacy is above the regulatory minimum in most subsidiaries there is need for additional capital for the two entities.

Zimbabwean operations are capitalised to the tune of US$31,5 million against a requirement of US$12,5 million.
Group chief executive Mr Douglas Munatsi said the negotiations with the potential investor are subject to shareholders approval.
“The board is currently evaluating different options of raising new capital including discussions with a third party, which if successful and subjects to shareholders approval, may result in a possible private placement.”
A private placement is a funding round of securities, which are sold without an initial public offering, usually to a small number of chosen private investors.

BancABC listed on the Zimbabwe Stock Exchange and the Botswana Domestic Board now has a balance sheet of US$1 billion, the first in the history of the company.
The bank said during the period under review the group has so far drawn down US$13,5 million from the outstanding funds from the International Finance Corporation convertible line of credit.

For the six months, BancABC saw its total income for the group going up 24 percent to BWP 311 million from BWP45 million recorded in the same period last year.
Net operating profit was BWP67 million, going up 48 percent to the comparable period.
Profit before tax for the group increased 84 percent to BWP63 million while profit attributed to shareholders was BWP 37 million.

During the period, operating expenses for the group increased 18 percent from BWP206 million to BWP244 million. The increase was largely attributed to increased span of activity as retail and SMS banking is rolled out.

Bank deposits for the entire group increased by 22 percent from the December 2010 figure to BWP6 billion while loans and advances increased 31 percent to BWP4 billion.
Zimbabwean operations had its tax profit up five-fold attributed to significant growth in all revenue lines despite increases in costs.

Loans and advances over the period increased to BWP 1,5 billion and deposits also increased significantly by BWP1, 7 billion.
Tanzania’s attributed profit was 69 percent ahead of prior year owing to an increase in non-interest income.

The subsidiary’s good performance was negated by impairments, which were high vis-a-vis the rest of the group. The charge for the period was BWP11,5 million, representing 45 percent of the group’s impairment charge.