TROUBLED Allied Bank is pinning its survival hopes on the implementation of the government economic blueprint, Zimbabwe Agenda for Sustainable Socioeconomic Transformation (ZimAsset) and further easing of economic sanctions declaring that is will emerge as a strong player in the market.
Nqobile Bhebhe Chief Reporter
The bank said it is eyeing profitability by year end and has appointed specialists to spearhead its capitalisation strategy.
In a statement accompanying the bank’s financial results for the year ending December 2013, the bank’s chief executive officer Stephen Gwasira expressed optimism that the bank has a bright future.
“The successful implementation of ZimAsset and the softening of sanctions by the European Union should see a growth in the national economy, thereby presenting business growth opportunities for the bank.
“The bank will introduce a number of products that will exploit the opportunities presented thereby enhancing value for our customers.
“The bank has a great future ahead of it” Gwasira said.
He added: “The recently announced monetary policy provided clarity on regulatory minimum capital requirements and this has helped speed up the current discussions with potential investors.
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“The bank currently is below the set minimum requirement. The finalisation of the capital transaction will see Allied Bank complying with the set capital requirements of the current $25 million and subsequently $100 million by 2020.”
Gwasira said the bank’s capitalisation and liquidity plan is structured in such a way that both capital and liquidity will be enhanced resulting in new products anchored on the banks’ increased capacity.
As at December last year, total assets for the bank dropped 15% to $42,82 million compared $40,89 million in the previous year.
“This is largely attributed to subdued volumes arising from diminished capacity to lend precipitated by liquidity challenges. Significant efforts were made to reduce costs and grow revenue, which saw income increasing to $4,4 million from $3,9million in 2012,” Gwasira said.
“This translated to an operational loss of $3,1 million in 2013 compared to operational loss of $4,1 million in 2012.”
Transport and Infrastructural Development Minister Obert Mpofu acquired nearly 100% shareholding in Allied Bank, previously known as the Zimbabwe Allied Banking Group, about two years ago when one of his investment vehicles, Trebo and Khays (Pvt) Ltd, injected over $20 million to rescue the struggling bank.
Local banks are crafting recapitalisation plans for consideration by the Reserve Bank of Zimbabwe.
The formulation of the recapitalisation policies is being made after the extension of the $100 million minimum capital levels for banks to 2020 as monetary authorities seek to facilitate a safe and strong financial industry.
