ABCH registers loss in FY19 as Group anticipates COVID-19 blow

  • Net interest income went down by 28%
  • Non-funded income overtook funded income for the first time since 2016
  • Operating expenses declined by 5.4%

Harare – ABC Holdings (Zimbabwe) Limited (ABCH) recorded a loss of USD25.3 million for the year ended 31 December 2019 compared to the profit of USD13.9 million earned in the prior comparable period.

The Group’s net interest income was down by 28% from USD115.1 million in the comparative year to USD82.6 million in the period under review.

The decline has been attributed to lower interest margins, partially compensated by growth of loans and advances, witnessed in Botswana and Mozambique in the consumer and corporate loan books respectively.

Non-interest income increased by 16% from USD81.1 million from the prior comparable year to USD93.8 million for the year ended 31 December 2019.

The growth was driven largely by improved foreign currency trading revenue which significantly grew from USD18.9 million for the year ended 31 December 2018 to USD45.2 million in the ear under review.

This according to the Group was the first time for non-funded income to exceed funded income since 2016.

Uncertainty remains on the full impact of the COVID-19 pandemic and the Group said it continues to monitor the situation and implement measures to prioritise the health and safety of employees, customers and stakeholders and has already activated the business continuity processes to weather this crisis.

“While we believe that our business will see the impact of the pandemic on a wide scale this will only become clearer in the coming months. The Group is monitoring the situation very closely from all aspects”, the Group said.

ABCH’s operating expenses excluding losses on monetary items in the period under review decreased by 5.4% to USD168.5 million from USD178.1 million for the prior comparable year.

The decrease was largely due to the effects of currency translation on Zimbabwe costs as well as the effect of the strategic cost management initiatives across the Group.

Total assets in the period under review contracted from USD1.9 million at 31 December 2018 to USD1.7 million at 31 December 2019 due to the IFRS 5 impairment loss recognised on subsidiaries held for sale as well as the impact of Zimbabwe currency translation on the statement of financial position.

ABC Holdings Limited is the parent company of a number of sub-Saharan Africa banks operating under the BancABC brand that offer a diverse range of financial services including personal, business and corporate banking as well as asset management, stockbroking and treasury services

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