Metropolitan Bank seeks US$50m line of credit

its Mauritius-based parent shareholders, Loita Capital for private sector financing.
The bank’s chairman, Mr Wilson Manase, in a statement for the financial period ended December 31 2010, said they had secured US$5 million from PTA Bank for private sector working capital.
“This line of credit (US$50 million) is expected to be finalised and utilised in the second quarter of 2011,” said Mr Manase.
During the period under review, Metropolitan achieved a profit before tax of US$2,07 million, representing a 4 percent increase.
The deposit base for the bank increased 262 percent from US$12,1 million in December 2009 to US$43,8 million as at December 2010.
Total advances for the year amounted to US$32,4 million. Increases in deposits was attributed to organic growth (profits from internal operations), which resulted in new products being offered, attracting a number of account holders.
Zimbabwe’s total deposits are estimated at US$2,6 billion and more than 80 percent of the funds are controlled by the four major banks.
The structure of the country’s banking sector remains tilted towards short-term financing, accounting for over 90 percent of total deposits.
The entrance of new banking institutions has entailed stiff competition, which could force more banks to tap into the unbanked market.
Mr Manase said the country’s financial landscape continues on an upward trend as new players are coming into the sector and others consolidating their positions.
“Interest rates although relatively high in comparison to global rates, they were notably coming down in tandem with the marginal increase in bank deposits,” he said.
Financial results published by banks indicate that banks are not reluctant to fund the productive sectors of the economy due to lack of long term financing. Zimbabwe’s banking sector, like many other sectors of the economy, is still recovering from the after-effects of a decade long economic crisis.
Comparatively, deposit rates particularly for short term deposits have generally improved, reflecting the banks’ efforts to mobilise non-transitory deposits.
The bulk of the banks made profits from non-interest income and this situation has also been due to the absence of investment instruments such as treasury bills or other Government securities.
Ideally, the main income stream for banks should be net interest and should be able to cover the bank’s operational costs.
Non-interest income broadly consists of dealing income, commissions and fees, income from sale of assets as well as fair value adjustments.