Walter Muchinguri Assistant Business Editor
The MBCA Bank recorded a 33 percent jump in profits to $5,3 million during the year ending December 31, 2014 as net interest income grew by $2,2 million on the back of increased lending to its customers.
Total income of the bank was up 13 percent to $25,5 million from $22,6 million in the prior year.
The bank’s operating expenses grew at a lower rate of 7,4 percent resulting in the increase in profit during the period under review.
“Strict cost management was introduced while expanding the footprint resulting in the muted increase in operating costs despite the increase in branch network.
“The total balance sheet grew marginally to $188,9 million from $179,6 million primarily due to repayments from major customers by the end of December 2014,” the bank’s managing director, Dr Charity Jinya, said.
Loans and advances to customers constituted 49 percent of the total balance sheet, compared to 43 percent in 2013 while cash and cash equivalents decreased to 38 percent from 42 percent in 2013.
Total deposits increased by 6 percent to $138,7 million from $131,3 million in line with the asset growth of the bank.
The level of fixed deposits increased to 23 percent compared to 15 percent in the prior year as a way of managing balances against a background of liquidity constraints in the market towards the end of the year.
“The bank is in contact with its clients to work on modalities for them to access the Nedbank Capital’s Export Credit Insurance Corporation of South Africa (ECIC) backed facility,” Dr Jinya said.
In terms of operations the wholesale banking division contributed 42 percent of total operating income for the bank during the period under review, up from 38 percent reported in the prior year.
“The bank’s customers continued to enjoy the group’s support in terms of a $75 million off balance sheet line of credit and $50 million from Afreximbank’s lines of credit for commodities.
“These facilities, together with own resources, enabled the bank to provide much needed working capital support to clients.
“The division’s performance continued to be biased towards agriculture, mining and retail sectors, with inroads having been made to provide services to new players in these sectors,” Dr Jinya said.
The retail banking division’s contribution towards total operating income of the bank, however, fell from 43 percent in 2013 to 38 percent during the period under review.
Dr Jinya said the division will continue to focus on rolling out new products relevant to customers as well as expanding the branch network in the economic pools of the country.
The banks treasury’s contribution was up marginally from 19 percent to 20 percent due to an increase in foreign exchange dealing profits as well as revenue from Treasury bills.
The division’s operations were, however, weighed down by subdued money market activities due to the absence of the lender of last resort facilities, limited access to regional and international credit lines, and lack of tradable assets.
The bank also launched new products such as vehicle asset finance and mobile banking as a way of gaining a competitive edge and providing banking convenience to its customers.
A new branch was opened in Kwekwe as the bank continued to increase its branch footprint throughout the country for the convenience of its clients while paying attention to the benefits of automation to improve market reach.
Looking ahead, Dr Jinya said the bank will continue to build a sustainable base of operations as it prepares for the improvement of the economy, which will be supported by the implementation of Government initiatives.
“The bank is working on initiatives to improve funding for medium-term and vehicle asset finance products. In addition, a mortgage product will be rolled out within the first half of 2015,” she said.