NMB pursues offshore loans

HARARE - Dual-listed NMBZ Holdings Limited (NMBZ) says it will continuously seek for more international credit lines to help ease the liquidity crunch in the country.

This comes as Zimbabwe’s economy has been marred by uncertainty following President Robert Mugabe’s election victory, which critics say were rigged in his favour.

Tendayi Mundawarara, the group chairperson, said NMBZ is cautiously waiting to see whether the economic environment would become more certain and predictable in the post-election period.

“Whatever the case, the group will continue to scout for more international lines of credit,” he said.

Early this year the London and Zimbabwe Stock Exchange-listed company had a $14,8 million capital injection from three strategic investors namely AfricInvest, Norfund and FMO.

James Mushore, NMBZ chief executive noted that the high country risk and huge debt overhang might militate against the company’s desire to get offshore credit.

“The current liquidity challenges have now been exacerbated by write-off of utility bills.

“This development is certainly going to negatively impact on liquidity and obviously everyone will be affected,” said Mushore at an analyst briefing on Thursday. 

Although the group’s banking arm was not directly affected by the cancellation of utility bills by local government, outgoing Finance minister Tendai Biti last month warned that seven commercial banks were heavily exposed.

In the half year to June 30, the group’s total comprehensive income went up by four percent to $2,67 million from $2,56 million.

The group’s net interest income went up by 28 percent to $9,5 million from $6,8 million recorded in prior year’s comparable period while non-interest income also went up by 17,9 percent to $8,1 million.

“This was mainly as a result of commissions and fee income which amounted to $7,5 million.

“The banking sector’s financial performance was adversely affected by the Memorandum of Understanding on interest rates and bank charges,” said Mundawarara.

Operating expenses amounted to $13 million and these were driven largely by administration and staff related expenditure.

The group’s total assets grew by 17 percent from $226 million as at December last year to $264 million in the period under review.

The assets comprised mainly loans, advances and other accounts, investment in debentures, cash and short term funds, investment properties, property and equipment.

Gross loans and advances increased by 20 percent from $152 million as at December last year to $183 million for the current period.

Total deposits increased by 10 percent to $210 million in the midst of declining market deposit base while the bank’s liquidity ratio closed the period at 40,76 percent and this was above the statutory requirement of 30 percent.

In the period under review, the banking arm’s capital adequacy ratio was 18,4 percent, way above Reserve Bank of Zimbabwe (RBZ)’s  minimum required 12 percent.

Mundawarara said the results were achieved under a relatively subdued economic and operating environment which was characterised by an illiquid market and a general tightening in the economy in light of the national elections on July 31.

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