ABC Holdings Zimbabwe Secures U.S.$100m

The ABC Holdings (ABCH), parent company to a number of sub-Saharan Africa banks operating under the BancABC brand, has secured about US$100 million capitalisation after the completion of shareholder’s loan conversion.

In a statement for the H1 ended June 30, 2019, the Pan African financial services group said: “We are pleased to announce that in June 2019 Atlas Mara completed a conversion of a shareholder’s loan in ABCH of US$89 million into cumulative non-redeemable preference shares, thereby improving the group’s total equity from US$74,4 million at December 31, 2018 to US$100,7 million at June 30, 2019”.

The group said this was partially offset by the impairment loss on sale of subsidiaries recorded for the period under review.

In a bid to improve its ability to underwrite more business, in February this year, ABCH injected additional Tier I capital into BancABC Tanzania amounting to US$3 million.

The financial services group mentioned that, “All banks were adequately capitalised with healthy capital adequacy ratios as at June 30, 2019,” said

During the period under review, ABCH operating expenses decreased to US$76,5 million from US$81 million.

The decrease was largely due to the effect of translation of Zimbabwe costs as well as the effect of strategic cost management initiatives across the group.

“Total assets contracted since December 2018 from US$1,9 billion to US$1,6 billion at June 30, 2019 due to International Financial Reporting Standards 5 impairment loss recognised on subsidiaries on sale, as well as the impact of currency translation on Zimbabwe statement of financial position,” said ABCH.

It said the impact of the Zimbabwe dollar’s depreciation against the US dollar since the beginning of the year took toll on its performance.

As a result, net interest income of US$39,8 million was 31 percent down from US$57,9 million in the comparative period.

Healthy loan book growth was seen in the Zambia business, which made significant strides in public sector lending as well as on the consumer and corporate lending in Zimbabwe.

Non-interest income increased by 40 percent from US$37,3 million for the six months ended June 30, 2018 to US$52,2 million for the six months up to June 30, 2019.

This was largely due to improved foreign currency trading performance in Zimbabwe, Mozambique and Zambia as focus continued on non-funded income growth.

“The group’s impairment charge reduced from US$3,7 million during the first half of 2018 to US$0,7 million for the six months ended June 30, 2019, an 80 percent decline.

“This was due to impairment releases from recoveries made, notably in Zimbabwe, Tanzania, and Mozambique as well as continued adherence to the group’s improved credit monitoring and recovery processes,” said ABCH.

Source: The Herald