eBusiness Weekly
Enacy Mapakame
Financial services firm, GetBucks Microfinance Bank, slid into a loss position of $20 million for the half year to December 31, 2019 from a profit of $21 million in the same period in the prior year.
The financial services firm attributed the loss to a $10 million net monetary loss as the bank’s assets are pertinently assets.
In historical terms, the bottom line rose 64 percent to $18, million compared to $11,3 million reported in the same period in the prior year.
Operating expenses reduced by 54 percent, which is because of the fact that current financial period is six months yet prior is 12 months. The latter is coupled with reduced activities in order to curtail costs.
Borrowings reduced to $47 million from $78 million reflecting real reduction in funds available for deployment into the loan book, a reduction is reflected in the adverse movement in bottom line.
During the six months period, customer deposits increased by 40 percent to $12,7 million.
At $132 million, total assets fell 36 percent with the biggest source of reduction being loans and advances to customers which saw a 68 percent reduction.
“The 36 percent reduction in total assets reflects the fact that the bank’s capital preservation strategy was not able to fully preserve shareholder value at a higher rate than inflation. Negotiations for material funding lines are at advanced stages.
“The Bank does not have a net foreign currency exposure,” said GetBucks in a statement accompanying the financial results.
At $58,2 million, net equity position was greater than the minimum capital threshold.
Indications are that the bank is actively pursuing strategies to ensure compliance with the US$5 million new minimum capital requirement effective December 31, 2020.
GetBucks did not declare a dividend in order to retain and grow capital in the prevailing environment.
The operating environment has been unstable for businesses, characterised by foreign currency shortages, weak exchange rate and high inflation significantly increasing the cost of doing business with particular pressure on employee costs. Despite these challenges management says the bank will continue to focus on using technology to deliver cutting edge solutions to client’s needs in line with global trends.
