• GetBucks Microfinance Bank’s net interest income increased by 62% to ZWL399 million.
• Loans and advances to customers also increased substantially by 751%  to ZWL1.53 billion.
• The cost-to-income ratio of 111% in 2022 indicates the operating expenses exceeded the income generated

Harare - GetBucks Microfinance Bank’s net interest income increased by 62% from ZWL220 million in 2021 to ZWL399 million in 2022. This shows that the bank's lending activities grew significantly during the year, generating more interest income. However, the net interest margin declined from 24.8% in 2021 to 15.2% in 2022. The decline in the net interest margin indicates that while lending increased, the net interest income did not increase proportionately, implying reduced profitability from lending activities.

The total income, including net interest income, fee and commission income, other income and gain on foreign exchange, increased by 66% from ZWL308 million in 2021 to ZWL1.48 billion in 2022. While the bank recorded strong growth in total income due to growth in business operations, the loss position was due to disproportionate growth in major expenses. The cost-to-income ratio of 111% in 2022 indicates the operating expenses exceeded the income generated, a sign of reduced efficiency. Improved cost efficiency and control is required to boost profitability.

GetBucks seems to have a strong liquidity position as evidenced by the cash and cash equivalents which constitute the largest component of the total assets in both 2022 and 2021. The cash and cash equivalents increased significantly by 654% from ZWL207 million in 2021 to ZWL4.55 billion in 2022. This shows that the bank has enough cash and cash equivalents to meet its short-term obligations. The loans and advances to customers also increased substantially by 751% from ZWL179 million in 2021 to ZWL1.53 billion in 2022, showing the bank's ability to generate more interest income.

The bank is well capitalized as shown by a sizable equity of ZWL1.53 billion in 2022, which translates to 37% of the total assets. The equity is mainly made up of revaluation reserves and share premium. The share capital remained unchanged at ZWL25 000, indicating no new shares were issued. The revaluation reserves decreased by 8% from ZWL792 million in 2021 to ZWL793 million in 2022. The accumulated losses increased from ZWL228 million in 2021 to ZWL434 million in 2022, reducing the total equity. Overall, the equity shows the bank's ability to absorb any potential losses.

The bank's asset quality are declining as evidenced by the increase in allowance for expected credit losses (ECL) from ZWL 19 million in 2021 to ZWL48 million in 2022, a 151% increase. The ECL provides for potential default in the loan book. The significant increase in ECL implies the bank expects more defaults from its loan customers going forward. However, the ECL ratio of 3.1% in 2022 shows that more than 96% of the loans are performing, which is a good ratio. In conclusion, while the bank exhibits a strong liquidity position and is well capitalized, the profitability and asset quality needs improvement. 

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