Getbucks records $20m loss

GETBUCKS Microfinance Bank Limited (GMBL) posted a $20 million loss for the six months ended December 2019 owing to net monetary losses as the bank’s assets are predominantly liquid.

BY TATIRA ZWINOIRA

The loss for the period under review was registered after a profit-after-tax of $21 million in the comparative 2018 period.

“The primary reporting numbers are inflation adjusted. Borrowings reduced from $78 million to $47 million reflecting real reduction in funds available for deployment into the loan book. The 40% reduction is reflected in the adverse movement as the income statement moved from a $21 million profit in prior year to a $20 million loss in the current year,” GMBL chairman Rungano Mbire said in a statement accompanying the results.

“This was predominantly a result of a $10 million net monetary loss as the Bank’s assets are predominantly monetary. In historical terms, the bottom line increased by 64% to $18,7 million. Operating expenses reduced by 54%, which is because of the fact that the current financial period is six months yet prior is 12 months.”

Mbire added: “The latter is coupled with reduced activities in order to curtail costs.”

Despite customer deposits increasing by 40% to $12,7 million in the period under review, from comparative $9,1 million in the previous period, GMBL’s performance was largely subdued.

Further, net interest income declined by 68% to $20,66 million for the period under review from a previous comparative of $64,42 million.

In that regard, total assets reduced by 36% to $132 million for the half year ended December 2019, from a previous comparative of $205 million, with the biggest source of reduction being loans and advance to customers.
Loans and advances declined by 68% to $38,47 million in the period under review, from a comparative of $118,86 million, owing to the hyperinflationary environment.

“The 36% reduction in total assets reflects the fact that the bank’s capital preservation strategy was not able to fully preserve shareholder value at a higher rate than inflation. Negotiations for material funding lines are at advanced stages,” Mbire said.

“The bank’s $58,2 million net equity position was greater than the minimum capital threshold. The bank is actively pursuing strategies to ensure compliance with the US$5 million new minimum capital requirement effective December 31, 2020.”

Speaking about the future, GMBL will continue to focus on using technology to deliver cutting edge solutions to its clients’ needs.

Management will continue to explore opportunities to preserve value in the tough economic environment.
Regarding COVID-19, Mbire said the bank activated its business continuity plan in order to ensure it is able to continue to provide services.

Do you have a coronavirus story? You can email us on: news@alphamedia.co.zw

%d bloggers like this:
Enable Notifications.    Ok No thanks