Zimbabwe News and Internet Radio

Agribank posts $9,6m profit

By Africa Moyo

Agribank recorded a $9,6 million profit between January and October this year driven by a number of factors chief among them strong growth in non – funded income from increased customer accounts, thrusting it on course to surpassing this year’s profit target of $10,1 million.

Agribank
Agribank

This was said by the bank’s CEO Sam Malaba last week while presenting on “Corporate recovery and strategic turnaround in the public sector”, during the Public Sector Audit and Financial Management Conference.

Mr Malaba said a number of new products, particularly electronic-based channels, and a jump in transactional volumes, has also helped Agribank to ramp up its profit on a year-to-date basis.

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“Growth in transaction volume particularly through the electronic banking channels, significant growth of the loan book mainly on the agriculture portfolio, sustained growth in interest income (and) utilisation of POS machines (assisted the bank to achieve $9,586 million to October this year),” he said.

The profit registered in the 10 months to October, has already eclipsed the $7,9 million profit achieved for the whole of last year, which is also more than the $4,8 million recorded in 2016.

Mr Malaba believes sound management at the bank, together with capitalisation from the shareholder, Government, have turned around the operations of Agribank. Government has capitalised Agribank to the tune of $49 million since 2014.

A further $5 million is expected this year. Mr Malaba said the capital has allowed Agribank to restructure and recruit competent staff.

“Parastatals need to be adequately capitalised to implement turnaround measures. Such measures may include retrenchment, which is a very costly exercise.

“For Agribank, capitalisation enabled the bank to restructure and allowed for recruitment of competent staff. Capitalisation (also) expanded the bank’s scope to lend,” he said.

Mr Malaba also said it was important for parastatals to have an “effective board of directors”, which provides oversight.

He said the board should protect the institution from political interference by the shareholders’ representatives.

Agribank, said Mr Malaba, has never encountered political interference in its operations.

Mr Malaba said operations of some parastatals are affected by some ministers who, “at times may appoint people that are not qualified as board members”.

“This situation is exacerbated by the fact that when the minister leaves the ministry, the board is fired and new board members are appointed.

“Agribank has been fortunate that there has been stability in terms of board appointments, with the board and management being allowed to function without political interference,” said Mr Malaba.

He also expressed hope that the enactment of the Public Entities Corporate Governance Act in May this year, will enhance the operational independence of parastatals for their viability. The Herald

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