Home » General » Govt Injects U.S $30 Million Into Agribank

The Agricultural Development Bank of Zimbabwe (Agribank) said Government injected $30 million in fresh capital into the bank which is expected to positively impact on its future performance.

The State-owned bank, whose core mandate is to fund the agriculture sector, has been battling to boost performance in the last few years owing to, among other things, low capitalisation.

Agribank chairman Mr Sij Biyam said Government had last month injected fresh capital into the bank.

“The shareholder injected $4 million during the year ended 31 December 2014,” the Agribank chairman said in a statement accompanying the bank’s financial results for the year ending December last year.

“Subsequent to the year end, in May 2015, the Reserve Bank of Zimbabwe (RBZ) issued on behalf of the Government of Zimbabwe, zero percent 10-year Treasury bonds for the capitalisation of the bank amounting to $30 million.”

The injection allowed the bank, which recorded a $9 million loss for the year ended December 2014, to exceed the RBZ’s $25 million minimum capital threshold.

In 2013, Agribank posted a $9,2 million loss.

Agribank’s accumulated loss position since 2013 stands at $40,7 million.

Mr Biyam said the bank’s performance in the review period was hit by impairment charges as well as reduced lending due to the tight liquidity situation in the economy.

Non-interest income jumped 9,4 percent to $12,89 million while interest income grew by nearly seven percent to $7,38 million during the review period.

“The loss was mainly a result of impairments charges amounting to $6,8 million and the low level lending due to the prevailing liquidity conditions,” said Mr Biyam.

Under-capitalisation had also impacted on its ability to on-lend as net loans and aances were down 15 percent to$77 million.

Agribank’s core capital stood at $7,6 million at the end of last year.

Mr Biyam said while operating costs remained fairly unchanged at $22,9 million compared to $22,7 million the previous year, the bank will undertake a restructuring exercise.

“The realignment includes rationalisation of staff and adoption of a new structure, with the entire process expected to be completed by end of June 2015,” the Agribank chairman said.

In the outlook period, Mr Biyam said the bank was looking at financing mechanisms for emerging groups such as the small to medium enterprises, smallholder farmers and active micro-businesses that are involved in the agriculture value chain.

New Ziana

Source : The Herald