Oliver Kazunga, Senior Business Reporter
MBCA Bank, one of Zimbabwe’s leading financial institutions, is set to avail $75 million working capital to local companies.
Funding remains a major hurdle to the growth of the local industry – presently operating below capacity – with an average 43 percent overall capacity utilisation, according to the Confederation of Zimbabwe Industries (CZI).
The bank confirmed the proposed plan in its financial statement for the year ended December 31, 2015 released last Friday.
“In addition to the lending on the MBCA balance sheet, the bank continues to benefit from the major shareholder’s technical support as well as a $75 million line of credit to provide commodity finance to Zimbabwe companies,” it said.
It is hoped that if advanced to industries, the $75 million credit line would go a long way in improving the companies’ operations on the back of the liquidity crisis in the country.
Zimbabwe’s re-engagement with the international financial institutions and successful implementation of structural reforms, the bank said, are expected to unlock opportunities for the country and enable medium to long-term growth.
During the period under review, MBCA’s capitalisation stood at $42,8 million and on target to meet the regulatory capital level of $100 million by December 31, 2020.
“Profit after tax grew by eight percent from $5,380 million in 2014 to $5,835 million in 2015, largely from net interest income, which increased by 10 percent to $14,753 million. This was as a result of the loan book, which increased by 11 percent,” it said.
The bank’s none interest revenue decreased by seven percent to $12,792 million primarily due to reduced transactional business from companies and individuals who were adversely impacted by low economic activity.
Last year, MBCA Bank’s balance sheet grew to $243,8 million from $188,9 million primarily due to growth in the loan book and treasury bills, which grew by 11 percent and 32 percent respectively.
“The bulk of the treasury bills were Afrexim Bank trade debt backed securities. Loans and advances to customers constituted 42 percent of the total balance sheet, compared to 49 percent in 2014. The growth in cash and cash equivalents was to ensure that the bank was adequately resourced to meet the growing requirements for cash by our customers at year end.”
The bank’s total deposits have grown by 39 percent to $193,2 million from $139 million in line with its asset growth.