MBCA Bank has reported a profit after tax of $5.7 million in the full-year to December 31, 2016, three percent lower than the $5.8 million in the prior year.
Revenue increased by 13.2 percent from $27.5 million in the prior year to $29.97 million on the back of increases in both net interest and non-interest income.
Net impairment loss on financial asset climbed from $720 834 in the prior year to $3.7 million.
“Total operating expenses increased by 23 percent largely due to an increase in the impairment charge of 417 percent as a result of a single significant provision, and an increase in staff costs of 14% as the Bank committed to an expansion in footprint,” chief executive Charity Jinya said.
Net interest income increased marginally by 1.8 percent from $14.8 million in the prior year to $15 million while non-interest income increased by 17 percent from $12.8 million last year to $14.95 million.
“The growth in non-interest revenue was mainly on the back of the volatile movements of some currencies,” Jinya said.
Total assets grew by 22.5 percent to $299 million from $244 million in the prior year mainly as a result of bank and cash balances which grew by 50 percent.
Net loans and advances constituted 32 percent of the total assets, compared to 42 percent in the prior year while cash and cash equivalents increased to 57 percent from 46 percent.
Total deposits increased on the back of cash withdrawal limits imposed by the central bank to deal with the current cash crisis.
“Total deposits grew significantly by 23 percent to $236.749 million from $193.223 million in line with the Bank’s strategic deposit mobilisation initiatives and difficulties in accessing foreign currency by some clients,” said Jinya.
Loans and advances fell 7.9 percent from $103.2 million in the prior year to $95 million as a result of the bank’s cautious lending approach to mitigate default risk.
However, non-performing loans ratio increased to 5.26 percent from 2.93 percent recorded in the prior year.
The bank holds $1.89 million worth of RBZ treasury bills (TBS) on its balance sheet while its local tradable bills increased by 175 percent from $363 596 in the prior year to $1 million in the period under review.
The bank is still far below the core capital requirement by RBZ for banks by 2020 but said will achieve the regulatory capital level given that the operating environment improves.
“The Bank’s core capital as at 31 December 2016 was $47.927 million and is on target to meet the regulatory capital level of $100 million by 31 December 2020, subject to an improvement in the economic environment,” chair, Willard Zireva said.
The bank’s liquidity ratio improved to 83 percent from 69 percent last year, above the regulatory limit of 30 percent, while its capital adequacy ratio at 27 percent is above the regulatory limit of 12 percent.- The Source