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Business Reporter
THE government has injected $30 million into the Agricultural Bank of Zimbabwe (Agribank) ahead of the deadline for financial institutions to meet minimum capital requirements this month, the bank said.

The Reserve Bank of Zimbabwe (RBZ) set $100 million minimum capital requirement for banks by 2020 from $12.5 million.

Reporting a flat performance for the full year to December 31, 2014, the bank noted, in its financials, loss for the year marginally narrowing to $9 million from $9.2 million in the prior period.

It attributed the loss to impairment charges amounting to $6.8 million and low level lending due to the prevailing liquidity conditions.

Its net interest income grew from $6.9 million in 2013 to $7.38 million in 2014, representing a modest growth of 6.95 percent.

During the period non-interest income increased from $11.7 million to $12.8 million.

The increase in non-interest income has been attributed to increased transaction activity resulting from enhanced business development initiatives such as introduction of new products and services in line with demand and the evolving business environment.

Interest income was flat at $12,4 million after the bank reduced its loan book, with loans and advances falling to $77 million from $90 million in prior year.

“The bank received $4 million capitalisation from the government in November, 2014. The bank’s core capital as at December 31 was $7.575 million.

“The bank is pleased to advise that the government, as the shareholder of the bank has capitalised the bank to the tune of $30 million,” Agribank chairman Sij Biyam said in a statement accompanying the audited financials released yesterday.

“The capital injection in May has therefore enabled Agribank to achieve a Tier 1 core capital level in excess of the Reserve Bank of Zimbabwe minimum capital threshold of $25 million.”

The bank said it would embark on a restructuring exercise to reduce operating costs which stood at $22.9 million last year.

“Pursuant to the above, the bank is streamlining its operations and realigning its structure for enhanced service delivery and efficiency gains for optimal costs.

“The realignment includes rationalisation of staff and a new structure with the entire process expected to be completed by end of June 2015,” it said.

On the outlook the bank said it banked its hopes on ongoing efforts by the government to review certain economic policies in particular the indigenous and empowerment measures, ease of doing business, re-engagement of the international community and attraction of foreign direct investment.

The bank has vowed to consolidate its position in supporting the emerging economically active groups such as SMEs, small holder farmers and other active micro-business entities that are critical to the agriculture value chain.