STATE-owned Agribank has returned to profitability, posting a US$8 million profit in 2017 from US$4 million in 2016, two years after the United States of America lifted sanctions on the bank. Agribank was among other companies perceived to have been propping up the regime of former President Robert Mugabe. The Zimbabwe Independent business reporter Tinashe Kairiza (TK) spoke to the Agribank chief executive Sam Malaba (SM) on the bank’s efforts to attract offshore credit facilities in the absence of the embargo. Below are the excerpts:
TK: Last year you reported US$8 million profit up from US$4 million in 2016, what has been driving this profit growth?
SM: Basically, the recovery that you are seeing has been a result of the growth in terms of our non-interest income of 115% which saw the growth from US$4,7 million to US$10 million and that growth in non-interest income is a result of the exponential growth in our Information Communication Technology based transactions. Our e-channels grew by 1800% from the level of 200 000 in January to the level of 3,6 million by December and we are therefore benefitting from the strategy of investing in technology innovation that we did in 2014/2015. We also invested in ICT and e-banking deliver channels, Point of Sale machines, agents banking etcetera. You will also see that interest expense went down by 8% and that was as a result of us being able to mobilise cheaper deposits which allowed us to repay the US$40 million that we had under the RBZ Afri-Trade facility. Our loan book quality also improved, we were able to reduce our Non-Perfoming Loans (NPL) ratio from 21,4% as at 31st December 2016 to 13,8% as at 31st December 2017. It reduced from 31, 14% to 13,81% and that means our loans impairments went down from US$4million to US$2,8 million.
TK: Let us talk about the range of measures that you are employing to satisfy the RBZ minimum capital requirements. What are you doing to satisfy the US$100 million threshold?
SM: Well look, remember that the RBZ has given banking institution options. There are three targets for 2020.There […]