Zimpapers Logo

Barclays Bank Zimbabwe will sustain growth in the loan book and offshore lines of credit, but contends it would close the year at lower than planned loan and deposit levels. In the year to December 2013, the loan book grew 26 percent while deposits grew 10 percent. The group said it will focus on increasing the level of lending in 2014.

Managing director Mr George Guvamatanga told the annual general meeting last week that the “Go-To Bank” strategy is on course in spite of the difficult economic conditions.

In the four months to April customer assets (loans) grew 23 percent to $119,4 million benefitting from growth in both retail and corporate loans. Financial director Mr Sam Matsekete said that a fifth of the book was in retail while the balance was with corporates.

Customer liabilities (deposits) were down 5 percent at $229,6 million. “Deposits continue to be largely transitory in nature even though the bank has maintained a steady core deposit base.”

The bank had reduced its uptake of government bonds at $60,4 million also inclusive of central bank balances from $82,1 million. Mr Guvamatanga said there was an 8 percent growth in capital from profit and movements in revaluation reserves to $45,3 million.

Mr Guvamatanga said the bank had managed to maintain strong liquidity ratios. The Loans to Deposit Ratio had grown to 52 percent from 40 percent last year while the capital adequacy ratio was at 17 percent. Core Tier capital 1 was at 15 percent against the regulatory 8 percent and the liquidity ratio was at 48,6 percent against the required 30 percent.

In the period interest income had grown at a slower pace than loans at 135 percent while non funded income was up a marginal 1 percent reflective of what Mr Guvamatanga said was constrained growth in transactional activity.

The cost to income ration was at 86 percent while staff costs to operating costs were 57 percent. “Operating costs in the period were contained within 2013 levels. There however continues to be pressure on certain cost lines especially occupancy and IT related lines.”

The loan loss ratio was at 0,7 percent reflecting a strong loan portfolio.
Overall, Mr Guvamatanga said the banking sector was stable but delicate. “The lending environment remains risky with non-performing loans now at 17 percent across the sector. We will however continue with our safe bank model and to grow a quality loan book.”

The group will increase transaction volumes to boost income while leveraging more on the Barclays Group capabilities on lending and channels.
Last year $40 million offshore facilities and guarantees were facilitated by the group while the group expects this figure to have doubled by the end of May “and possibly grow to beyond those levels as the year progresses,” said Matsekete.

Guvamatanga said the group would develop more e-channels but cost, scale and efficiency initiatives will become more critical under sub-optimal economic performance.

At the AGM directors fees for last year were approved at $85 579 and audit fees at $305 825. There was also the usual yearly mourn from shareholders on why the group was not paying out dividends. – FinX.