The government has ploughed back a US$914 000 dividend from Agribank to increase its capital base and improve its lending capacity to the farming industry.
Government, which is the main shareholder in Agribank, was on Monday expected to get a US$914 000 dividend from the bank which posted a US$4.8 million profit for 2016.
However, it emerged after a series of closed door meetings with the bank’s directors, the state resolved to retain the dividend in the bank, citing the need to consolidate its turnaround strategy from losses incurred during the past few years.
Contacted for comment, the Minister of Finance and Economic Development Cde Patrick Chinamasa told the ZBC News the decision not to use the dividend took into consideration the need to increase provision of low cost loans to farmers.
“Indeed, we have came up with the resolution for the benefit of the farmers as the bank is critical in unlocking production,” said Cde Chinamasa.
The bank’s chief executive officer, Mr Sam Malaba says the resolution by the main shareholder, the government, is a reflection of its commitment to increase future profitability.
“They are really concerned about the need to increase profits so we really appreciate that,” Mr Malaba said.
The government with a 100 percent stake in the financial concern, has also mandated the directors to continue forging ahead with a restructuring policy meant to attract capital while improving depositor confidence by focusing on productive sector lending.