LISTED financial institution, BancABC, has resolved to prioritise financing infrastructure development projects of national significance as this would boost economic growth.
In its financial report for the year ended December 31, 2019, BancABC said its corporate, investment banking and business banking units have since shifted focus to participating in infrastructure and energy-related projects.
“The two units have supported the rehabilitation of the country’s road networks, service delivery projects across most major cities and funding alternative energy solutions to supplement the current supply shortages on the national grid,” said BancABC.
The infrastructure gap in Africa presents a great opportunity as infrastructural development acts as a key enabler of economic activity to boost the production capacity of economies across the continent, said the bank.
“Financing the development of housing, energy, water and sanitation, transport and communication should yield results in well-constructed policy environments.
“One of our key priorities is to contribute to the financing and development of alternative energy solutions and limiting the impact of climate change.
“The corporate and investment banking team is accelerating financing the growth of renewable energy sources at a retail and corporate level and proactively supporting the development of Zimbabwean businesses working to address the country’s power deficit,” it said. BancABC has already taken the place of lead financial advisor in the Sakubva Urban Renewal project.
“The bank is playing an active role in syndicating a project that will see the construction of a modern apartment complex as well as market stalls for vendors,” reads the statement.
The financial institution said Sakubva Urban Renewal was just one example of several projects it aims to deliver on in the 2020 financial year before similar projects are extended across the country. During the period under review, BancABC total operating income grew by 869 percent to $468 million against $54 million in the prior year despite the challenging external environment.
“Restated for hyperinflation, operating income grew by 136 percent outpacing inflation when compared to the restated $334 million income in 2018. This top-line growth filtered through to the bottom-line, as profit after tax in both historical and inflation adjusted terms was up 26 times and 2,6 times from 2018 at $283 million and $176 million respectively. The year 2019 is compared to the restated profit after tax of $67 million,” it said.
The bank’s loan origination efforts continued to focus on strict underwriting standards from small to medium size enterprises (SMEs), commercial, consumer unsecured lending and retail segments, which contributed to an improvement in expected credit losses relative to the growth in credit risk assets in the year under review. The bank’s total regulatory capital stood at $614 million up by $520 million from $94 million achieved in 2018.
“This was largely driven by organic growth, retained earnings and balance sheet restructuring.
“Related regulatory ratios increased to 46,8 percent from 39 percent in the prior year. The strengthening of these ratios illustrates the group’s efforts to adapt to the operating environment and solid balance sheet,” said BancABC.
During the year under review, the bank’s balance sheet was strengthened by foreign denominated investments and growth in the property portfolio.
“This helped offset the negative effects of inflation and saw the restated balance sheet end the year at $2,7 billion. “Total deposits rose by 220 percent to $1 billion in 2019 from $309 million reported in 2018 due to good growth in the pool of corporate deposits,” it said.
Source – chronicle