Home » Business » ZIMBABWE GOVT RECAPITALIZES AGRICULTURAL DEVELOPMENT BANK WITH 30 MILLION USD INJECTION

HARARE, June 17 — The Zimbabwe government has injected fresh capital of 30 million US dollars to recapitalize the Agricultural Development Bank of Zimbabwe (Agribank), bank Chairman Sij Biyam th says.

He said here Tuesday that the injection of fresh capital into the bank was expected to positively impact on the future performance of the State-owned bank, whose core mandate is to fund the agriculture sector,

The bank has been battling to boost performance in the last few years because of low capitalization among other factors.

“The shareholder (the government) injected four million USD during the year ended Dec 31, 2014,” the chairman said in a statement accompanying the bank’s financial results for the 2014 financial year. “Subsequent to the year end, in May, 2015, the Reserve Bank of Zimbabwe (RBZ) issued on behalf of the Government of Zimbabwe, zero per cent 10-year Treasury bonds for the capitalization of the bank amounting to 30 million USD.”

The injection allowed the bank, which recorded a 9.0 million USD loss for the year ended December 2014, to exceed the RBZ’s 25 million USD minimum capital threshold.

In 2013, Agribank posted a 9.2 million USD loss. Agribank’s accumulated loss position since 2013 stands at 40.7 million USD.

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 rose 9.4 per cent to 12.89 million USD while interest income grew by nearly seven per cent to 7.38 million USD during the period.

“The loss was mainly a result of impairments charges amounting to 6.8 million USD and the low level of lending was due to the prevailing liquidity conditions,” said Biyam.

Looking ahead, Biyam said the bank was looking at financing mechanisms for emerging groups such as the small to medium enterprises (SMEs), smallholder farmers and active micro businesses involved in
the agriculture value chain.

SOURCE: NEW ZIANA

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