Harare – NMBZ Holdings has reported a 533% increase in profit before tax of ZWL74.5 million for the half year ended 30 June 2019 compared to ZWL11.8 million recorded in the comparative period last year and this gave a rise to total comprehensive income of ZWL61.4 million, which is an increase of 576% from a total comprehensive income of ZWL9.1 million achieved in the prior year.
Considering in the changes in the monetary system, the Group highlighted that the financial highlights shown are applicable with the closing rate for 2018 being at USD/ZWL 1:1 AND 2019 at USD/ZWL 1:7.0.
The Group achieved basic earnings per share of 14.55 cents per share compared to 2.34 cents in the same period last year and this translated into the headline earnings per share rising to 3.59 cents compared to 2.25 recorded in the period ending June 2018.
“The significant differential between the basic and headline earnings per share is largely due to investment properties fair value adjustments and gains arising from the translation of foreign currency balances due to the change in functional and reporting currency from USD to the new local currency (ZWL),” Group chairperson Mr Chikwanha said in a statement accompanying the financials
Mr Chikwanha highlighted the difficulties dominant in the macroeconomic environment at present characterised by inflationary pressures and foreign currency shortages and these have impacted on the operations of many businesses in the country.
The Group’s operating expenses amounted to ZWL23.9 million, up 42% from ZWL16.8 million in the same period last year.
“The increased costs, which were contained below the general inflation rate of 176% for 30 June 2019, were due to higher transaction processing and operational costs arising from the bank’s digital drive and continued expansion into the broader market segments as well as general inflationary pressures,” Mr Chikwanha said.
He noted that the Group recorded an expected credit loss reversal on financial assets measured at amortised cost amounting to ZWL943 144 compared to an impairment charge of ZWL1 421 078 during the six months ended 30 June 2018 due to increased collection efforts on the banking subsidiary’s non-performing loans.
“The Bank has continued with its drive to reduce non-performing loans (NPLs) and this saw the NPL ratio reduce from 7.43% as at 31 December 2018 to 3.38% as at 30 June 2019. The drop in the NPL ratio is largely due to aggressive collections and stricter credit underwriting standards,” Mr Chikwanha said.
Total assets increased by 31% from ZWL527.1 million as at 31 December 2018 to ZWL691.6 million as at 30 June 2019 attributed to a 182% increase in property and equipment, a 228% increase in investment properties and a 68% increase in cash and cash equivalents.
Gross loans and advances increased by 0.4% from ZWL262.3 million as at 31 December 2018 to ZWL263.4 million as at 30 June 2019 mainly due to a slowdown in advances during the period under review in view of the prevailing economic conditions.
Total deposits increased by 10% from ZWL435.0 million at 31 December 2018 to ZWL480.3 million as at 30 June 2019 as a result of deposit mobilisation strategies and the translation of foreign denominated deposits to the local currency.
“The Bank maintained a sound liquidity position with a liquidity ratio of 34.11% and this was above the statutory minimum of 30%,” Mr Chikwanha said.
On the outlook, Mr Chikwanha said the Bank will continue to accelerate the deployment of POS machines throughout the country and enhance all the e-channels for the convenience of our transacting customers.
“The Group will also continue to broaden its target market by widening its catchment area to include segments of the mass market previously not catered for, thereby contributing to the financial inclusion agenda,” he said.
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