The Agricultural Bank of Zimbabwe (Agribank), in its present state, has evolved in various forms over the past 82 years, with its latest development making current headlines that the bank has so far spent $1,1 million on information communication technology (ICT) infrastructure hardware, as it presses ahead with efforts to ensure system stability and provide more functions for effective service delivery.
The entire ICT core banking upgrade is expected to gobble $6,6 million, of which almost $3,9 million is required in foreign currency. Agribank Chief Executive Officer Sam Malaba, told the bank’s annual general meeting last week that the upgrade is expected to be concluded in the second half of next year.
“The bank is in the process of upgrading the core banking system to bring improved functionality, performance and to bring it within the supported software versions by the vendor, Temenos. The project is being implemented over 18 months, targeting completion by the second half of 2019. The objective is to improve on the stability of the system and bring more functionalities for effective service delivery,” said Malaba.
Apart from the core banking system, the ICT upgrade also targets agency banking (point of sale machines). The bank plans to have up to deploy 10 000 POS machines by year-end, as it heeds Government calls to promote the usage of plastic money as part of measures to stem cash shortages. Agribank’s ICT and e-channels grew last year, processing an estimated 18 million transactions. December recorded the highest volumes of 3,6 million from about 0,2 million in January last year, representing a transactional growth of more than 1 800 percent, in respect of mobile, e-channels and POS machines.
Government owns Agribank 100 percent, and has been battling to capacitate the financial institution so that it plays its role of financing agriculture efficiently. Through the 2018 National Budget, Government allocated $10 million towards capitalising Agribank, which is striding towards achieving the $100 million capital requirement to be a tier 1 bank by December 31, 2020.
As at December last year, the bank’s minimum regulatory capital was $54,9 million, which is double the current minimum threshold of $25 million. Agribank, which has been recording profits in the last two years, expects to record yet another profit this year. By May 31 this year, the bank had recorded a profit of $2,9 million, which was 13 percent above the $2,579 million budgeted for the period. Last year, the bank posted a profit after tax of $7,9 million compared to $4,8 million in 2016, representing a 65 percent growth driven by non-funded income.
The bank declared a dividend of $3 million to the shareholder, who immediately ploughed it back into the business for recapitalisation. Permanent Secretary in the Ministry of Finance and Economic Development, Mr Willard Manungo, who attended last week’s AGM, praised Agribank for recording profit for the “second consecutive year”.
