The government wants Agribank to upgrade its ICT infrastructure after the financial institution experienced a surge in e-transactions to 1,7 million in April this year from 20 000 recorded at the start of the year as deposits rose significantly.
In the first five months of the year, Agribank recorded a profit before tax of $1,8 million compared to a budgeted profit of
$463 203 in the five-month period of January to May this year on the back of interest income earned on the capitalisation of Treasury Bills.
Speaking at the bank’s annual general meeting in Harare yesterday, Finance minister Patrick Chinamasa implored Agribank to invest more in the ICT infrastructure.
“The bank has certain challenges, some of them which are a result of some of the successes that we have achieved, while others are to do with the increased use of plastic money. For instance, where in previous years plastic transactions were 213, these have since grown to 1,7 million transactions. That, from my point of view, is a very positive development. But it poses challenges on the bank in the sense that the ICT structure is not coping,” he said.
“So as we go into the future, this is an area that they [Agribank] have to attend to seriously so that they rectify it to a position where they can cope with the increases in plastic transactions. But, I am looking at it as a very positive thing. All they need to do is put more resources to upgrade their ICT infrastructure.”
Agribank overturned its previous loss making position to a profit of $4,8 million for their financial year ending December 31 2016. It had posted a loss of $6,8 million in 2015.
In the January to May period, customer deposits rose by 15,2% to $102,73 million from a budgeted $89,15 million.
The shareholders’ equity also rose during the period by 15% to $51,09 million from a budgeted $44,31 million.
Besides the interest income earned on Treasury Bills, the overall performance was owing to a surge in e-transactions which made the bank set aside over $2 million to invest in upgrading their ICT infrastructure.
Agribank chief executive officer Somkhosi Malaba said that the $2 million could even rise by over $5 million if they keep witnessing such growth in numbers.
“That growth is continuing as we increase the number of POS (point of sale) machines. We are doing another 2 500 POS machines, we are also introducing agency banking. Basically, we are just saying that the market will just have to focus on e-channels. If you go to South Africa, you do not use cash, if you got to the UK, you do not use cash you use your cards so we have to get into that system of using POS machines,” he said.