The bank achieved a 71% increase in operating income from a previous US$4,6 million to US$8,2 million, it said in its half-year report for the period ended June 30.
Agribank was capitalised to the tune of US$13,5 million compared to the minimum regulatory capitalisation of US$12,5 million during the period under review.
The government injected additional capital in June of US$1,25 million after cabinet approved a shareholder restructuring of the bank. Under the new restructuring arrangement, government will retain 51% shareholding while the strategic partner will be allocated a 49% stake.
The strategic partner will be expected to provide equity finance and mobilise lines of credit. Agribank said a continuous quest for offshore lines of credit would be imperative in the outlook period in order to meet growing funding requirements of its clients.
The government-owned bank acquired an offshore line of credit earlier this year worth US$30 million from the Industrial Development Corporation of South Africa.
“The initial drawdown was done towards the end of May and by the first week of August all the funds had been fully disbursed to clients,” the bank said in a statement accompanying the results.
Loans and advances to customers stood at US$66,7 million, growing by 31% compared to the same period last year. The manufacturing sector snapped up 17% of the bank’s loans and advances, agricultural (39%), services sector (25%) and mining (4%).
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“The loans to deposit ratio for the period under review was 85% against an industry average of 75% and this loan book was of high quality,” the bank noted.
The five year strategic plan also includes mobilisation of additional lines of credit and aggressive deposit mobilisation. It will also seek to enhance multi-delivery channels for its banking products and upgrading the bank’s information technology system.
