NMBZ in $3,5m profit

HARARE - Dual-listed financial services group NMB Zimbabwe (NMBZ) posted a $3,5 million profit for the half year to June 2016 on the back of a strong interest income position, despite tough economic conditions.

Group chairman Benedict Chikwanha said the bank — which posted an attributable profit of $2,6 million — continued to make inroads into the broader market.

“The banking subsidiary continued to make inroads into the broader market segments, thereby laying a foundation for a strategic shift towards small to medium-sized enterprises,” he said, in a statement accompanying the group’s unaudited financials for the half year.

Chikwanha also said NMBZ had continued to source international lines of credit and was presently in the process of drawing down a $20 million line of credit and finalising legal documentation for another $15 million approved facility.

In the six months under review, attributable profit was, however, 17 percent lower than prior comparable period on the back of a difficult operating environment as chief executive Benefit Washaya said the group’s total income had decreased nine percent to $26 million compared to $28,8 million prior year comparative.

“The drop in income was partially cushioned by a drop in operating expenses at $13,5 million  down by four percent compared to $14 million the previous year, as a result of cost rationalisation and containment measures

“Interest income was almost flat, at $17,4 million compared to the $17,5 million in 2015. A bigger drop was recorded on the fee and commission income, down from $10,5 million in 2015 to $7,5 million,” Washaya said

The income drop was driven by a combination of controls on bank charges and a drop in transactional volumes due to the cash and nostro challenges currently obtaining in the banking sector.

“The bank has also been on a drive to migrate customers to the less expensive electronic delivery channels.

“Net foreign exchange gains, which in the first six months of 2015 had amounted to $609 218, came to $353 209,” he said.

Shareholder funds in the six months increased five percent from $50,5 million as at December 31, 2015 to $53,1 million, as a result of the attributable profit recorded for the half-year.

The bank’s capital adequacy ratio at 20,8 percent was higher than the Reserve Bank’s minimum requirement of 12 percent, while its liquidity ratio, at 32,5 percent, was again  above the regulatory minimum of 30 percent.

The non-performing loans ratio came down from 14,9 percent as at June 30, 2015 to 11,1 percent driven by aggressive collection efforts and loan disposals to government special purpose vehicle, Zimbabwe Asset Management Corporation (Zamco).

“…Further, the bank surrendered to the Zamco loans amounting to $11,6 million,” Chikwanha said, applauding the recent decision by two of NMBZ’s shareholders — FMO of the Netherlands and Norfund of Norway — to join forces with Rabobank of the Netherlands in pooling investments across Africa through a new investment vehicle, Arise.

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