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ZB pumps US$1,9m more into manufacturing

ZB BANK last year increased its credit allocation to the manufacturing sector by more than US$1,9 million from a year earlier as companies sought more working capital in an environment where import restrictions created demand for local goods.

Lending to the sector rose 24 percent to US$9,45 million as a result.

Statutory Instrument 64 of 2016, which became effective in June last year, removed goods that can ordinarily be produced locally from the Open General Import Licence.

The cooking oil, rubber and plastic sub-sectors have been showing signs of recovery and robust growth.

ZB group CEO Mr Ronald Mutandagayi told The Sunday Mail Business that recovery in manufacturing was attracting fresh capital.

“Our lending to the manufacturing sector has increased by close to US$2 million from US$7,6 million to US$9,45 million in the year 2016 and this can be attributed to the need for new working capital for some companies whose products were placed under SI 64.

“The injection of the working capital and recapitalisation in some companies has seen their capacity utilisation increasing to above 50 percent.

“The duration of our loans only lasts up to 12 months; therefore, they are short-term loans. Bad debt recoveries in the agriculture sector and renewal of loan facilities at relatively lower levels resulted in a lower loans and advances book.

“The loan portfolio indicates a shift towards productive sectors of the economy; great care will be taken regarding consumptive lending in the private sector as applicants generally tend to be overburdened from debts of different types,” said Mr Mutandagayi.

The bank’s parent, ZB Financial Holdings, reported that profit in the year ended December 31, 2016 rose 22 percent to US$11,4 million from US$9,4 million a year earlier on robust bad debt recoveries, growth in non-funded income and positive fair value performance in listed equities.

Revenues in the period climbed 12 percent to US$65 million. The banking unit contributed US$9,8 million to profit, while ZB Life weighed in with US$40 000.

The group’s total assets jumped five percent to US$493 million as the value of Treasury Bills held rose 15 percent.

Bank deposits increased two percent to US$275 million from prior year’s US$269 million after customers opened new accounts.

However, loans and advances were flat at US$99 million as the bank cut back on lending. Also, net underwriting income gained 4 percent to US$8,8 million.

ZB will be reviewing its reinsurance unit in Mozambique where renewed civil conflict is making markets jittery.

Source :

sundaymail

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