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Oliver Kazunga, Senior Business Reporter
THE Agricultural Bank of Zimbabwe (Agribank) has notched up a $2,16 million profit after tax in the half year ended June 30, 2016, emerging from a loss of $3, 76 million in the comparable period last year.In an unaudited financial statement for the period under review, Agribank chairman Mr Sij Biyam said the profit was mainly a result of positive outcome of the bank’s business growth strategies.

“The bank recorded a profit after tax of $2,16 million for the half-year ended June 30, 2016 registering a 157,4 percent recovery. The profit was mainly a result of the positive outcome of the bank’s business growth strategies implemented following the conclusion of staff rationalisation and injection of capital by the shareholder in 2015,” he said.

The bank is wholly owned by the Government.

Mr Biyam said the bank has also benefited from the transfer of some of its non-performing loans (NPLs) to the Zimbabwe Asset Management Company (Zamco).

Zamco is a special purpose vehicle created by the Government in 2014 and started operating last year to absorb NPLs from commercial banks to clean their balance sheets so that they can confidently trade.

In the half year to June 30, 2016, Agribank’s net interest income increased by 89,2 percent to $6,49 million driven by diversified lending.

During the period under review, non-interest income marginally increased by two percent from $7,05 million in 2015 to $7,18 million this year.

“Cost containment measures resulted in operating costs declining by 16 percent to $10,88 million in the first half of 2016 compared to $13 million over a similar period in 2015. The bank is set to sustain cost containment in 2016 and beyond,” said Mr Biyam.

In the outlook, he said medium-term economic growth prospects for Zimbabwe were positive, particularly with successful re-engagement with creditors and clearance of the external payment arrears with multilateral financial institutions.

This is expected to pave way for access to international capital markets.

“Agribank envisages increased international support and enhanced private sector partnership in agriculture financing following the clearance of external payment arrears. The bank is consolidating its position in supporting agriculture with special focus on small holder agriculture as an integral part of the agriculture value chain,” said Mr Biyam.

@okazunga.