News Column

Barclays Grows Loan Book

August 14, 2014

Shame Makoshori

BARCLAYS Bank Zimbabwe Limited's loan book for the half-year to June 30, 2014 has increased due to increased lending to both businesses and individuals. Barclays has insisted that it will not irresponsibly extend loans against the backdrop of increasing non performing loans in the banking sector.

"Our loan book grew by 14 percent year on year as we extended facilities to businesses and individuals across most sectors of the economy," George Guvamatanga, the bank's managing director, said in a statement accompanying interim results for the six months to June 30, 2014. Loans and advances to customers went up to US$111 million during the period, from US$97,4 million during the prior comparative period last year, with Barclays showing, in a big way, that there were still reliable debtors out there who deserved support.

"In growing the loans we have maintained our focus on a quality asset book as demonstrated by impairment stock to gross loans ratio of two percent and a loan loss ratio of 0,7 percent," said Guvamatanga. Pre-tax profits charged over two fold to US$2,5 million during the review period, from US$1,1 million during the same time last year, as net interest income increased by US$1,1 million to US$6,8 million, from US$5,7 million last year.

"The profit after tax of US$1,7 million was achieved compared to US$0,8 million from the previous period resulting from pre-tax profit growth of 126 percent year on year," he said.

"This performance was premised on income growth of nine percent. This is against the backdrop of interest yields trending down and transaction activity being subdued. Cost increases were contained within two percent benefitting from continued focus on cost efficiency initiatives."

Deposits grew from the same period last year by three percent to US$238 million during the review period. An analysis released last month indicated that the turmoil that has ravaged the liquidity starved banks could subside as banks resort to prudential lending. Advisory firm, IH Securities said the prolonged liquidity crisis besetting the banking sector is likely to subside by next year due to a number of measures taken by regulatory authorities to stabilise the sector.

The report, done days after the appointment of new Reserve Bank of Zimbabwe (RBZ) governor John Mangudya, appeared to discount gloomy forecasts of an acceleration of a banking sector crisis. The banking sector has been rattled by the liquidity crisis, blamed largely on a hard currency regime that has not been supported by the creation of new money through exports. The sector has also been hit by waning confidence and a reduction in disposable incomes fuelled by company closures.

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Source: AllAfrica

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