BancABC Zimbabwe profits up 14%

BancABC Zimbabwe profits up 14%
Published: 25 March 2014
BancABC Zimbabwe contributed to the group's profitability in the year to December 31, 2013 despite liquidity challenges in the operating environment.

BancABC Zimbabwe was one of the three country divisions that drove Botswana- based ABC Holdings' growth during the period under review.

"Banking subsidiaries achieved attributable profits of $34,8 million (BWP310 million) compared to $23,9 million (BWP213 million) registered in the prior year, a 46 percent year-on-year growth.

"Growth continued being driven by BancABC Botswana, BancABC Zambia and BancABC Zimbabwe all of which produced double-digit growth in attributable profit," said the group in a statement. BancABC Zimbabwe posted an attributable profit of $13,2 million (BWP118 million), which was a 14 percent improvement than the $11,5 million (BWP103 million) recorded in the prior year. Notwithstanding the challenging operational environment, the subsidiary recorded growth in revenues, which was only offset by higher impairments.

Net interest income increased by 78 percent from $25,5 million (BWP227 million) in 2012 to $45,4 million (BWP404 million) posted in the current year.

However, non-interest income declined by 7 percent to $22,1 million (BWP197 million) from $23,8 million (BWP212 million) in the prior year. Management attributed this to a reduction in bank charges as a result of the Memorandum of Understanding signed between the commercial banks and the Reserve Bank of Zimbabwe.

Net impairment charges increased by 123 percent to $10,3 million (BWP92 million) from $4,6 million (BWP41 million) recorded in the prior year.

This was largely due to tight liquidity conditions prevailing in the economy which resulted in most corporates and individuals failing to service their loans as they fell due. The subsidiary's gross NPLs, however, declined from 17,1 percent in the prior year to 12,4 percent as at December 31, 2013.

Net NPLs also declined from 14,2 percent in the prior year to 8 percent in the current year. Operating expenses increased by 30 percent from $30,3 million (BWP270 million) in 2012 to $39,3 million (BWP350 million) from the increased activity as the number of branches in the country continued to increase, reported the group.
- BH24
Tags: ABC, BancABC,

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