The group’s operating expenses grew by 18%, largely due to increased activities in the retail and small to medium enterprise banking sectors.
A significant uptake of retail banking products has been witnessed, particularly in Zimbabwe, where retail banking is already profitable.
The group intends to substantially increase retail rollout with a target of at least 30 branches by year-end, as 21 branches are currently operational.
Beki Moyo, the BancABC’s group chief financial officer speaking on the sidelines of an analysts briefing last week said limited systems’ availability, stability and project execution had slowed down implementation.
He said this had militated against an aggressive approach towards expanding the branch network.
He said that the bank had already invested US$1,2 million and US$3,5 million on applications and equipment upgrade respectively.
“Zimbabwe’s ICT environment has been conducive to our retail banking rollout plans and currently we are 95% through with the upgrade process,” Moyo said.
BancABC noted the need to strike a balance between investing in brick and mortar and the effective distribution of banking products in line with international information technology trends.
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A number of banks in Zimbabwe have taken to investing in mobile banking as top-end and young ICT savvy customers are increasingly avoiding the inconvenience of a traditional physical visit to the bank for transactions.
Moyo also explained that all BancABC units were adequately capitalised although the group may need to raise additional capital to make the quantum leap in growth plans.
“All funds have been deployed to subsidiaries as capital from head office. Subsidiaries are paying dividends to the centre and we believe with time, head office will begin contributing meaningfully to the bottom-line,” said Moyo.
This was after head office entities in Botswana registered an attributable loss of US$4, 5 million) from up from US$882 000 in 2010.
Group CEO Douglas Munatsi was upbeat about the group’s performance in the six months under review and expressed plans to focus on growing consumer lending in Zimbabwe before year-end.
Loans and advances in BancABC Zimbabwe increased by 68% since December 2010 to US$219 million, a development that Munatsi attributed to a strong local appetite for loans, owing to the liquidity crunch and international banks apathy towards lending.
“Our desire is to play in the top-end of the market by growing loans, deposits, profitability and capitaliaation,” said Munatsi, adding that the group had carved a good niche in the market.
Munatsi said the group was aiming to raise more capital in the next six months with US$20 million being ideal for Zimbabwe, as the group is exploring all options to raise additional capital, including a private placement or a rights issue, among others.
Francis Dzanya, the BancABC chief operating officer said the group had initially set a modest 10% growth target for all country branches in terms of deposits, but Zimbabwe had exceeded the figure.
“Zimbabwe has been the star performer out of other subsidiaries in many respects, we just hope that the political situation will stabilise,” he said. Zimbabwe contributed 28% of deposits to the group after Botswana’s leading 33%.
