Agribank in bid to raise $100 million

THE Agricultural Bank of Zimbabwe (Agribank) says it is seeking prescribed asset status for a new batch of agro-bills worth $100 million, as it continues to expand its financial support to the agricultural sector.
Last year, the state-run financial institution raised $300 million worth of agro-bills, which were channelled towards boosting the agricultural sector. Elfas Chimbera, Agribank’s chief executive, said the Agricultural Marketing Authority (AMA) was appointed as the bank financial advisor to raise $100 million agro-bills. “The bank has since applied for the necessary concession. AMA on the other hand has been granted borrowing powers from the parent ministry.

The bank is now waiting for the Insurance and Pensions Commission (Ipec) to grant the prescribed asset status as well as government to give these bills guarantee status,” Chimbera said in a statement accompanying the bank’s financials. He said the bank will continue raising agro-bills and will target raising more resources to expand financial support to agriculture.

The bank said macro and business outlook remains difficult, though modest recovery is projected for 2021 and anchored growth on agricultural recovery.

Chimbera said Agribank will continue to support exporters in agriculture as well as its value chain hence contribute to foreign currency generation for the country.
“The bank also introduced loans in foreign currency mainly targeted at exporters in the agriculture value chain. The bank will continue to finance cash crops i.e. tobacco, cotton, soya beans and horticulture. A number of farmers in horticulture producing macadamia, fruits, flowers and avocados, among others benefitted from the bank’s financing in 2020,” Chimbera said.

The bank said macro and business outlook remains difficult, though modest recovery is projected for 2021 and anchored growth on agricultural recovery.
“The bank envisages sustained business growth on the back of anticipated agriculture recovery, notably export subsectors such as horticulture, tobacco and sugar cane, among others. These sub sectors are expected to continue with the strong growth trajectory and the bank is positioned to record business growth in tandem,” Chimbera said.

He said the bank will also continue to explore financial inclusion strategies to roll out banking and financial services to the banked and the unbanked.
Agribank recorded a loss of $129,836 million during the year ended December 31, 2020 compared to a loss of $1,9 billion recorded in the comparable period.

In historical terms, profit before tax increased by 1 086 percent to $569,1 million from $47,9 million in the prior period.
The bank attributed its profitability on improved revenue contributions from ICT delivery channels and electronic banking (e-channels), market growth in the loan book and foreign currency generation strategies.

Net interest income was down $404,688 million during the year under review from $409,254 million recorded the prior period.
Total income from POS machines for the year 2020 accounted for 40 percent of total non-interest income.

Agribank’s lending portfolio increased to $2 billion during the year under review from $268,4 million as the bank continues to pursue cautious asset growth with asset quality being a key priority.
“The bank’s lending portfolio increased during the period under review reflecting expansion in support of the agriculture sector. The bank also instituted measures to improve asset quality and yields and initiatives contributed to the positive results. Mindful of the current macro-economic environment, the bank increased the expected credit losses on financial assets,” Chimbera said.
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