AfrAsia Zimbabwe Holdings Limited posted a profit of $174 862 for the half-year ended December 31 2013 following a series of heavy losses in the past two years.
The holdings company has improved from a loss position of $16 million in the 18 months ended June 30 2013. In a statement accompanying the group’s financial results, AfrAsia acting chairman Charles Wawn said the financial services sector continued to be negatively affected by liquidity challenges, a fragile banking sector, depressed customer confidence and the poor country credit rating.
Wawn said the bank managed to raise $5 million through a rights issue and will raise $15 million through a private placement that will be concluded soon.
“Various strategic cost containment measures continued resulting in operating costs decreasing by 16% when compared to prior period. The conclusion of the private placement by February 28 will result in the group underwriting more business in order to achieve better results by the end of the financial year ending June 2014,” Wawn said.
The interest and similar income for the group went down to $10 million compared to $43 million in the eighteen months ended June 2013.
Net interest income stood at $6,4 million and net interest, income after impairment loss was $6,3 million.
Loans and advances to customers were lower at $66 million during the period under review compared to $92 million at June 2013.
Wawn said during the period under review liquidity challenges reached critical levels with the trade deficit having widened to $3,89 billion in November.
He said loans and advances from banks decreased by 0,4% to $3,65 billion as at December 31 from $3,67 billion in June reflecting the tough operating environment, non-performing loans increased to 15,92% as regulations being promulgated in the form of the microfinance.
He said overall liquidity is expected to remain constrained although the financial sector is expected to benefit from the restoration of the interbank market and the recapitalisation of the Reserve Bank of Zimbabwe.
“Liquidity challenges are expected to continue in the short to medium term until the critical shortage of foreign direct investment is addressed,” he said.