“Mitigation strategies have been put in place to ensure that the situation is contained and not repeated,” group CEO, John Mangudya, said last week.
The lines of credit come on the back of challenges the bank went through in processing Real Time Gross Settlements last year and in the first quarter of 2012. This had raised fears the bank had punched its weight by dishing out loans, most of which had become non-performing and that its Libyan investors wanted to pull out of the group.
Mangudya said last week, the lines of credit had been secured from the PTA Bank, Shelter Afrique and CBZ’s Libyan investor. He said the bank had secured long-tenure loans from the PTA Bank, Shelter Afrique and the Libya Arab Foreign Bank.
“We asked for a lot of money from the Libyans. so far, they gave us about US$10 million in treasury lines at concessionary rates,” he said.
The Libyans hold a 14% stake in CBZ.
“They will be bringing in more money. They have a call account and are saying keep the money there because they said you need more money than us. They have not taken up the dividend. Normally their policy is to re-invest,” he said.
Mangudya said the group would tap into the US$83 million facility with the African Export-Import Bank. The Afreximbank lines of credit have a long tenure. Of that facility, US$10 million is targeted for fertiliser, US$48 million through the Diaspora bond and US$25 million being a general line of credit.
In its results for the financial year ended December 31 2011, CBZ released a set of results that underlined its status as the biggest in terms of deposits and profitability. In the period under review, the group registered a profit after tax of US$30,3 million from US$18,8 million in 2010 representing a 61,2% jump.Total deposits were up 43,5% in 2011 to US$829,9 million while advances leapt to US$790,3 million from US$444,6 million.
In the outlook, CBZ projects a 48% growth in deposits. Despite such growth, the group also expects a modest 5% growth in total loans.
CBZ said its cost to income ratio had gone down to 56,5% last year from the 66,7% recorded in December 2010. The cost to income ratio is within local averages of 72% and regional comparisons of 61%.
The group said there would be cost-cutting measures aimed at further bringing the cost to income ratio down to 50% this year. — BY OUR STAFF