By Michael Gwarisa
AGRO financial services concern Agribank registered a US$4.8 million profit for the period ended 31 December 2016 at the back of a myriad of cost containment strategies the bank adopted over the period under review.
The profit according to the bank’s Chief Executive Officer Sam Malaba is a massive improvement from the US$6.3 million loss that was recorded in 2015.
“The positive performance marked an indication of the solid turnaround for the bank premised on the implementation of a range of turnaround initiatives following the capitalisation of the bank in 2015. The bank recorded an increase of 45.2 percent in net interest income for the year to close the year with US$15.9 million compared to US$17.8 million for the prior year.
“The non-interest income closed at US$5.3 million same with prior year. Notwithstanding bank charges reduction in 2016, the bank’s non-interest income remained constant as a result of the implementation of e-banking channels, in the second half year of the year,” said Malaba.
He added that measured cost containment strategies resulted in the bank recording a 14.5 percent decline in operating costs to US$22.3 million compared to US$26.0 million in the prior year.
“The bank continued to benefit from the staff rationalisation exercise completed in 2015 with staff to income ration closing the year at 30.8 percent compared to 57.7 percent in 2015.
“During the year, the bank had a healthy liquidity position, with liquidity ratio of 49 percent in December 2015 compared 37 percent in 2015.”
Total assets of US$204 million compared to US$172 million in 2915, representing growth of 18.6 percent. As at December 31, 2016, the bank was adequately capitalised with Tier Capital of US$51.1 million compared to regulatory minimum of US$25 million.
Meanwhile, the bank hugely invested in Information Communication Technologies (ICTs) during the period under review with significant milestones being recorded in the ICT interventions and new products, Mobile Banking and e-banking channels, micro-finance growth and green market projects.
“In respect of infrastructure upgrades, the following was done, we instituted a hardware infrastructure upgrade and memory virtualisation for LIVE and DR Sites, instant banking platform (Agriplus), issuance (Agriplus and Agricash), Agriplus (Instant issuance card) within two minutes a card is issued out.
“Key benefits of the instant Agriplus cards are reduced costs for the customer, improved customer experience and conveyance and hence promotion of financial inclusion and cashless transacting,” said Malaba.