BY TATIRA ZWINOIRA
AGRIBANK is targeting between US$40 million and US$50 million in fresh lines of credit from international financial institutions for on-lending to exporters, the bank’s chief executive Sam Malaba has said.
Speaking to NewsDay after presenting the bank’s financial results for 2018, Malaba said they had previously raised US$30 million from Afreximbank for exporters and production.
The bank is now in a position to engage foreign financial institutions and source cheaper lines of credit following its removal from the United States OFAC sanctions list in 2016.
“At the moment, we have raised US$10 million from Afreximbank which is for the export sector. We have also raised US$20 million through Afreximbank which is for local production and value addition. We are hoping to raise between US$40 million and US$50 million in terms of additional offshore lines of credit,” Malaba said.
“We are looking to raise these funds mainly from Afreximbank, Trade and Development Bank (formerly the PTA Bank), Industrial Development Corporation of South Africa and African Development Bank.”
In the full year to December, the bank posted a 63% increase in profit after tax to US$12,9 million driven by non-interest income.
“Growth in non-interest income was mainly due to increased transactions from ICT delivery channels and electronic banking (E-channels),” Malaba said.
Non-interest income contributed 69% to Agribank’s income portfolio, while interest income contributed 31% in 2018.
“Interest income grew by 21,2% from US$30,5 million for 2017 to close 2018 at US$37,1 million,” he said.
Agribank also registered a 53,4% growth in loans and advances to US$147,2 million for the period under review due to an expansion in agricultural lending.
Deposits remained flat at US$170 million.
Total assets grew by 14% to US$306,4 million from a previous of US$268,84 million.
The bank registered a 17% increase in operating expenses to US$27,9 million due to currency distortions.
In terms of capitalisation, Malaba said: “Shareholder’s (government) funds grew by 37% from US$57,7 million as at December 31, 2017 to US$78,9 million as at December 31, 2018 as a result of a capital injection and the current year’s attributable profit.
“We thank the shareholder for the US$10 million capital injection received in 2018, which is a positive step towards achieving the US$100 million capital requirement for a tier I bank by January 1, 2020.”
Agribank’s liquidity ratio closed 2018 at 69%.
Agribank has also doubled its Agro Bills to US$40 million for the current agricultural season from the last which was fully subscribed for productive lending