Agribank expects net profit of over $5 million

Agribank expects to report a net profit above $5 million for the full-year to December last year for the second successive year since recapitalisation in 2015, chief executive Somkhosi Malaba told a parliamentary committee on Thursday.

For years a perennial loss-maker, the bank reported a $4.8 million for 2016 after government which owns the bank, pumped in $30 million between 2015 and 2016.

“The external auditors are currently finalising the 2017 financial statements of the bank, however, the bank is in line to surpass its budgeted profit of $5 million when the audit is completed,” Malaba told the Parliamentary Thematic Committee on Indigenisation.

“The bank received substantial capitalisation over the past few years, with tier one capital now at $54.4 million. In 2016 the bank was capitalised to the tune of $30 million by government, allowing for the rationalisation and realignment that was completed in July 2015.”

Malaba said the bank still needs further capitalisation to reach $100 million by 2020 for tier one bank status.

“This is necessary for the bank to undertake the full range of banking and financial services including lease financing, mortgage financing, micro-finance and bancassurance among other areas,” he added.

The bank’s total financing for agriculture amounted to $78.9 million, with total drawdown to date amounting to $75.6 million.

However, the bank was not in a position to get long term financing from multilateral institutions such as the World Bank and the Africa Development Bank due to country’s failure to clear arrears to international financiers and violation of bilateral Investment Promotion and Protection Agreements (BIPPAS).

Zimbabwe is still viewed as a high political risk country, he added. – The Source

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