Agricultural Development Bank of Zimbabwe (Agribank) says it will not review its interest rates for now despite the prevailing economic situation which is in the country, businessdigest has learnt.
As the economic crisis continues to deepen, some of the banks in the country have reviewed their interest rates to avoid the risk of the rates being eroded by inflation which currently stands at 97,85%.
Speaking to businessdigest on the sidelines of the bank's annual general meeting held last week, Agribank chairperson Thomas Nherera said the bank has a good relationship with its clients as a result of maintaining their interest rates and this has helped the bank to produce positive results.
"What is driving that is we are working well with our clients. We are not changing the interest rates, and we are keeping our interest rates at the moment at that level unless there are external factors which may influence that but from a banking point of view our bank is not changing because of what is happening on the street. We have specific costs that we want to maintain, and we encourage our clients to use the funds for what they have borrowed for," Nherera said.
He also said they are already above their 2019 projections and by the end of the year they hope to perform better than what they did in 2018.
"I cannot give you specifically on how much we have now, but in terms of our budget, we are above our budget position. We are still halfway in the year and hopefully by end of year we should have performed a lot better than last year," he said.
Meanwhile, Agribank recorded a year-to-date profit to May 31, 2019 of ZW$4,6 million and an above budgeted profit of ZW$3,8 million, representing a positive 23% variance.
The interest income reached ZW$10,3 million for the period ended May 31, 2019 and it was also above the budget by 2% owing to the growth in business loans towards agriculture, related value chain and consumer loan book.
Total assets closed at ZW$342,5 million for the period ended May 31, 2019, which were also above the budget. Loans and advances contributed 46%, while Treasury Bills 22% of the total assets.
Notwithstanding the prevailing economic situation in the country, Agribank is targeting annual profit of $14 million for 2019, which will be a 17% increase from ZW$12 million recorded last year.