BANKING group ABC Holdings has restructured its loss-making unit in Tanzania as it moves to turn around the waning fortunes of the entity that had shown no signs of abating.
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ABC Holdings runs banking operations under the BancABC brand in Zimbabwe, Botswana, Zambia, Mozambique and Tanzania.
Bheki Moyo, the group’s chief financial officer told an analysts briefing last week that the restructuring has resulted in the creation of a Special Purpose Vehicle (SPV) that would house all the legacy issues and give the “operation a chance to move again.
“Post the reporting period, we have put US$20 million to support our business,” Moyo said.
He said the Tanzanian regulator had been supportive and the group was hopeful the operation would achieve a turnaround.
Moyo said assets that have been fully valued in the SPV total US$38 million and believes that it should be profitable as a standalone business.
BancABC Tanzania has been a drag on the group’s operations and in the first half of the year, posted a combined loss of US$3,6 million at a time other group subsidiaries posted after- tax profits.
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In the financial year ended June 30 2013, the group noted that while other subsidiaries had managed to bring the cost to income ratio down as they move to attain the benchmark 50%, it was a long way to go in Mozambique and Tanzania with 67% and 102% respectively.
Attributable profits more than doubled to BWP (Botswana Pula), 143 million from BWP56 million in the same period last year.
Profit after tax at BWP129 million was 133% up from the same period last year on the back of a strong performance by BancABC Botswana, BancABC Zambia and BancABC Zimbabwe.
In the outlook, group chief executive officer Douglas Munatsi said the target was to be a top tier bank in all markets.
He said the group had posted a “pleasing set of results as diversification of our business into retail banking is beginning to bear fruit”.
Munatsi said the group would successfully complete the retail bank rollout in Tanzania and Mozambique. The group plans to rollout 100 branches by 2015.
