Agribank recorded a 65% growth in profit after tax to$7.9 million for the year 2017 compared to $4.8 million in 2016 largely driven by improved non-interest income and lower non-performing loans ratio.
Chief executive Sam Malaba told a press briefing that Agribank is one of the state-owned enterprises which has turned around and consistently recording a profit.
“As you all know State Owned Enterprises are closely monitored in terms of compliance with Corporate Governance and we are therefore pleased to produce and publish audited results with clean opinion by the 31st of March each year,” he said.
The bank achieved 115 percent growth in non-interest income from $4.7 million in 2016 to $10 million, spurred by exponential growth in technology driven transactions.
Income from the bank’s electronic transactions grew to $3,6 million from $200,000 after heavy investment in ICT and E-banking delivery channels such as POS machines, mobile banking and agency banking.
Interest expenses, at $8.5 million fell eight percent from $9.2 million recorded in 2016, a result of paying off $40 million RBZ/Aftrade facility and replacing it with cheaper deposits.
Malaba also said the Bank is realizing positive benefits from the reduction in non-performing loans (NPLs) with the loan impairment charge dropping from $ 4.08 million in 2016 to $2.55 million in 2017.
He said the quality of the loan book improved significantly evidenced by reduction in the NPL ratio from 21.14% as at 31 December 2016 to 13.81% last year. “The banks is now targeting single digit NPL ratio by 31 December 2018,” he said.
Operating expenses grew eight percent from $22.27 million in 2016 to $23.97 million mainly due to business growth initiatives undertaken during the year. Regulatory capital as at 31 Dec. 2017 was $54.9 million, above the current minimum regulatory capital of $25 million.
He said the bank received $10 million capital allocated in the 2018 National budget, which he called a positive step towards achieving the $100 million capital requirement for a tier 1 bank by December, 2020.
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