BANKABC said the dollarisation of the economy had presented huge opportunities for the group saying management was working on strategies to capitalise on these opportunities.This week the banks said shareholders agreed to liquidate the portfolio of equity and real estate assets in Zimbabwe to meet the groups growth requirements.
The proceeds of the sale are expected to meet the groups funding needs
This new development has seen the financial institution postponing the planned rights issue and a draw down on the US$25 million loan facility BancABC had obtained.
In a statement accompanying the companys results for the six months ended 30 June 2009, BancABC said the board had decided that the portfolio of equity and real estates originally acquired for capital preservations in Zimbabwe be selectively and orderly liquidated to fund the groups growth requirements.
During the period under review, the groups balance sheet size increased marginally fromBWP4 billion as at 31 December 2008 to BWP 4,1 billion. The groups balance sheet grew by 24% year on year to June 2009. The deterioration in market conditions in Botswana, Tanzania and Zambia in 2009, coupled with liquidity challenges experienced in Tanzania and Zambia resulted in the group loan book declining by 4 percent to BWP 2,1 billion since December 2008.
Zimbabwean revenue was lagging behind as the economic output is coming off a very low base. Fair value gains on investment properties in Zimbabwe also declined from BWP 33 million in June 2008 to a BWP 12 million loss in June 2009.
Zimbabwes contribution to expenses increased by 5% to 14% in 2009, following dollarisation of the economy.
As a result BancABC Zimbabwes total profit went down from BWP 28 million to BWP 2,1 million for the period under review. BancABC Botswanas profit after tax of BWP 5,9 million was in line with prior year profit of BWP 6 million. BancABC Tanzania posted an attributable profit BWP 1,7 million against BWP 2,7 million achieved in the prior year.
BancABC Mozambique posted satisfactory results with profit after tax up 140 percent to BWP 17,5 million. This was driven by strong net interest and non-interest income earned and relatively low levels of impairments recorded. BancABC also said the International Finance Corporation had also agreed to disburse at least 50% of the convertible US$13,5 million loan immediately, subject to the amendment of the original agreement.
Due to continued instability in global and local economies, ABCH and CVCI Africa, a wholly owned subsidiary of Citigroup Venture Capital International Africa Fund have agreed not to effect the draw down of the proposed US$25 million investment in ABCH concluded last year.
Post published in: Agriculture