THE Merchant Bank of Central Africa (MBCA) deployed a total of 1,605 Point of Sale (POS) machines in 2017 up from only 26 in 2016, as the company moves towards meeting the growing transactional demands.
Following the prevailing cash crisis, most Zimbabweans have resorted to the formal banking system which has proved to be a better alternative owing to a number of transacting platforms on the digital space.
According to the bank’s Financial results for the year ended December, 2017, POS machines deployed countrywide increased from26 in 2016 to 1,605 in 2017.
“Year on year increase in card volumes was 400% and the bank continued to upgrade its systems to be able to meet the transactional demands on the system. Plans are underway to replace the core banking system and internet banking system as well as launch the Visa/Mastercard acquiring solution. A mobile banking app was introduced in 2017, while additional ATMs were installed in Harare and Bulawayo.”
Meanwhile, the bank delivered a good set of result for financial year 2017supported by growth in income as well as favourable cost ratios. Net interest income advanced 10% on the back of growth in income from investment securities, mainly the Afrexim Trade Debt Backed Securities (Aftrades) as well as a reduction in interest expense. Non funded income was up 19% supported mainly by account maintenance and transaction fees.
Mobile and point and sale transaction fees recorded the highest jump from $45k in 2016 to $1.5 million in 2017, a clear show of increased mobile money use over the financial year. Total income for the year was up 10% to $34.4 million. Absent in the 2017 income figures is ‘other income’ which was $1.2 million last year compared to nil in the current period under review.
There was an improvement in the cost to income ratio to 69% from 78% on prior year which management attributed to improved cost management. Net impairments were a positive $500k against a cost of $3.7 million last year following a recovery of some bad loans as well as write back of previous impairments. On overall net profit improved from $5.7 million to $7.9 million.
Total assets grew by 23% to $369.1 million mainly as a result of the bank’s increased investment in Aftrades and acquisition of Treasury Bills. There was also a marginal growth in loans by 3% to $98.2 million but as a proportion to total assets, loans declined to 27% from 32% in 2016.Total deposits grew by 26% to $297.4 million. Loan to deposit ratio went down to 35% from 42% in 2016.
The bank remains highly liquid with cash balances of $169.2 million making up the biggest asset in the balance sheet at 45% of total assets. Liquidity ratio was at 85% as at December 2017 from 83% in December 2016 against a prudential minimum requirement of 30%. The bank is adequately capitalized with a capital ratio of 32%, an increase from 27% previous year and above the regulatory requirement of 12%.