Oliver Kazunga, Senior Business Reporter
METBANK has secured a $10 million offshore credit line and had utilised $5.4 million of the facility as at December 31, 2015.
In a statement accompanying its financial results for the year ended December 31, 2015, the bank’s chairman Wilson Manase said the financial institution continues to pursue a triad business model as it seeks growth opportunities.
“To this end, the bank secured a $10 million line of credit, which as at year end was utilised to the tune of $5,4 million.
“In its quest for growth, the bank continues to pursue a triad business model covering commercial banking, property development and mortgage financing,” he said.
The strategy for commercial banking pillar has also shifted from the traditional high risk banking products to structured trade finance products incorporating off balance sheet synergies with leading corporates.
During the year under review, Metbank moved from loss making to profitability posting a $260,000 profit after tax.
In the prior financial year, the bank recorded a $3.2 million loss. Manase said they had moved into a profit making position after continued pursuance of austerity cost cutting measures.
“The bank reported profit after tax of $0,26 million during the period under review, which was a material improvement from the loss position recorded in 2014.
“The bank continued to pursue austerity cost cutting and containment measure, which saw a 44 percent downward movement in operating expenses to $10.9 million,” he said.
Manase said notwithstanding a reduction in net interest income, which was as a result of a reduced credit portfolio, earnings from other trading activities coupled with cost containment measures compensated for the depressed net interest income.
Other income increased by 17 percent to $1.5 million following commission earnings from third party products such as bank assurance among others.
During the period under review, the bank continued to pursue a hybrid of loan recoveries and new business generation, particularly with corporates showing capacity to recover from the current economic downturn.
The bank has also completed a restructuring exercise that resulted in the conversion of current liabilities amounting to $7.3 million into equity.
This resulted in the subsequent increase in capital and the overall compliance with the levels adjudicated.
On the outlook, Manase said: “In keeping with its five-year strategic plan, the bank continues to invest time and resources to its triad business model which shall see the bank tapping into the real estate and property sector, as well as develop products that will advance the financial inclusion as well as the ‘cashless society’ strategy.”