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Agribank to cut non-performing loans to below 10pc

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HARARE


Agribank is looking to whittle down the level of its non-performing loans to below 10 percent of the loan book by December this year. Managing director Sam Malaba said a total of $17 million NPLs have already been offloaded to the Reserve Bank’s, Zimbabwe Asset Management Company, and another huge chunk could go the same way. He cited the significant reduction in the level of the bank’s NPL’s, from over 30 percent a year or two ago, to 17 percent at the moment, as one of the four reasons the group had a rebound from a $3,7 million after tax loss in the half year to June 2015, to a profit of $2,15 million in the interim to June 2016. Other factors were the removal of the bank from the US Office of Foreign Assets Control (OFAC) sanctions list, business growth strategies, injection of $30 million fresh capital by Government and access to Afritrades facility, from which Agribank received $30 million, availed to Zimbabwe by Afreximbank. Agribank said loans and advances totalled $117,5 million from $129,8 million in the comparative period last year, representing a reduction of 9 percent in funding to borrowers. According to the RBZ, NPLs have the effect of reducing credit to productive sectors of the economy as banks manage risk. – Herald

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