Barclays Bank of Zimbabwe has hailed the narrowing balance of trade deficit to US$1.4 billion for the full year 2017 which had ballooned to US$2.1 billion in 2016, as reported in the latest Reserve Bank Monetary Policy Statement.
According to the group financial results for the year ended 31 December 2017, the result shows the effect of an improvement in exports and a reduction in imports compared to 2016.
“This shows the effect of an improvement in exports and a reduction in imports compared to 2016. Whilst the deficit is still high and, as an economy, we have to work towards reversing the deficit to a position of surplus reserves, the improvement trend is encouraging.
“Government revenue collections are also reported to have surpassed targets by 10% whilst government is embarked on efforts to contain recurrent expenditure, which should assist to ease pressure on the government’s fiscal space,”reads the report.
It adds that profit before tax was 75% up from prior year representing a five year compound annual growth rate (CAGR) at 53%.
“Profit before tax for the year was $25m, 75% up from prior year and representing a five year compound annual growth rate (CAGR) at 53%.
“The return on average equity closed at 22%, up from 18% in prior period. The capital adequacy ratio closed the year at 28% which is indicative of the business’ long term stability and huge scope for growth.
“Deposits grew by 13% whilst loan facility utilisation fell below internal targets as clients adopted more conservative approaches in drawing down loans.
“Facility utilization by the targeted corporate customers thus came out lower than prior years. 2017 was characterized by increased use of digital platforms and systems to avert the pressures of cash shortages. Within the projects to migrate systems to new platforms over the next year, we will be seeking to further enhance the Bank’s e-channels,”reads the report.
When the regulatory requirement for core capital of $100 million by 2020 was introduced, members were updated that the Bank would seek to meet that target through growth and retention of profits. The Bank is sustaining this approach. Whilst the profit growth for 2017 was strong, it remains necessary to retain profit to firmly support planned growth targets and to shield against headwinds from the environment that may work against those targets.