27 Mar 2014

ABC Holdings’ growth of 49 per cent has been clouded by impairments (bad loans) registered in Tanzania, Zimbabwe and Mozambique.

Announcing the results for the year ending in December 2013 , the chief executive officer, Mr Douglas Munatsi, and chief financial officer, Mr Beki Moyo, said they were optimistic as they had put measures in place to guard against impairments.

Attributable profit reached P198 million for the financial year ending December 2013 while impairments grew by 137 per cent and Mr Munatsi said the three countries were accountable for 83 per cent of BancABC’s total impairments.

BancABC Mozambique’s profit of P9 million was lower than the previous year, as total income weighed down by an increase in impairments. The impairments increased from P18 million to P51 million, the bulk of it coming from one client and this pushed credit loss ratio from 2.1 per cent to 3.5 per cent.

BancABC Tanzania impairments amounted to P135 million in 2013 and it recorded substantial losses for the period under review. Mr Munatsi said an aggressive approach has been taken on impairments and recoveries would only be accounted for on receipt of cash.

“It is anticipated that it will take between 12 and 24 months to achieve the desired turnaround,” he said. In Zimbabwe, BancABC’s attributable profit of P118 million was 14 per cent over the P103 million profit recorded in 2012. Profitability was

however affected by high impairments which increased to P92 million compared to P41 million in 2012. It is said that the impairments were a direct result of the liquidity situation in the country.

It is said that impairments in Botswana and Zambia are within the company’s range. Mr Moyo said the measures in place to guard against impairments include improving credit management from lending to collection.

He said the bank would also improve documentation and place more reliance on cash flow than on security. Operations in Botswana, Zambia and Zimbabwe recorded growth in business volumes although it was at a slower pace compared to previous periods as they consolidated their positions in the market.

Meanwhile, the company’s balanced sheet increased by 18 per cent to P15.6 billion from P13.4 billion recorded in 2012 and loans and advances also went up by 15 per cent to P10.6 billion from P9.16 billion.

Earnings per share increased by 10 per cent at 79.6 thebe owing to the higher number of shares following the rights issue concluded in July last year and the conversion of the IGC loan to equity. Mr Munatsi said 191 jobs were created during the year as they expanded their network and number of clients has grown. Ends