Staff Reporter
The African Development Bank (AfDB) has approved a US$7.5 million trade guarantee facility for the Central Africa Building Society (CABS), a move that has been seen as a show of confidence in the country’s banking system.
Speaking through a press statement today, Old Mutual Chief Executive Officer, Sam Matsekete said that the approval of a USD7.5 million facility to CABS by the African Development Bank (AfDB) demonstrated the confidence that the regional and international funders are placing on CABS.
“During the period, the African Development Bank (AfDB) approved a USD7.5 million trade finance transaction guarantee facility for CABS. This facility is a first of its kind under the AfDB’s new transaction guarantee instrument, which was formally launched last year.
“We are excited to be the first institution to have been granted such a facility by the AfDB. This demonstrates the growing confidence that regional and international funders are placing on CABS,” said Matsekete.
Matsekete said that the transaction guarantee facility would cover the payment risk taken on trade finance.
“The transaction guarantee facility covers the payment risk taken on trade finance transactions through the bank. This increases CABS` capacity to manage cross border transactions for customers thus making notable contribution to regional and international trade,” said Matsekete.
Matsekete highlighted that the initiatives to mobilize lines of credit were in line with Old Mutual`s strategy to support customers to grow their businesses whilst at the same time promoting growth in exports.
He further said that Old Mutual recorded a profit after tax of ZWL50billion in historical terms, up from ZWL14billion achieved in the prior period. He added that the growth was at the backdrop of a strong performance across all business lines.
Matsekete highlighted that the investment returns continued to drive the Group profits, achieving ZWL248 billion up from ZWL6 billion achieved last year adding that it was driven by gains on listed equities, investment properties, and the exchange gains on foreign currency denominated investments.
Meanwhile, CABS bank Managing Director, Moses Mpofu in the society`s financial period ended 30 June 2022 stated that the society wass committed to supporting private sector investment in Zimbabwe, as well as enabling its customers to invest into the future and create economic opportunities.
Mpofu said that as part of its commitment to invest in the economy of Zimbabwe, the society reasonably balanced portfolios of correspondent banking relationships after recently securing an additional correspondent banking relationship with EBI SA Groupe, Ecobank, Paris, to extend support for both inward and outward international payments for individual customers and not only corporates as before. He further said that to facilitate trade by local businesses, the Society arranged an Aftraf facility of US$20million with Afreximbank which would enable businesses to access and utilize letters of credit.
