“Diversification helped cushion performance” NMB

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Harare – NMBZ Holdings Limited which controls the NMB commercial bank in Zimbabwe released a fair set of earnings for the 12 months period to December.

The Group said the financial position was largely driven by the Bank’s continued diversification into the broader market segments, enhanced use of the bank’s digital offerings, stricter credit underwriting standards, containment of non-performing loan and fair value gains on investment properties and property equipment.

According to the Group’s results, inflation adjusted total income increased by 20% to ZWL730.8million from ZWL 611.3million recorded in the previous year.

The bank highlighted that operating expenses amounted to ZWL240.5 million, indicating a 17% decrease from ZWL298.5 million recorded in prior year attributable to cost containment measures as well as improved efficiencies arising out of digital innovations adopted by the Group.

The Group also added that impairment losses on financial assets measured at amortised cost amounted to ZWL11 million from a prior year amount of ZWL24.9 million due to a strict credit sanctioning regime which saw the underwriting of high creditworthy counterparties by the Banking subsidiary.

NMB also indicated that non-performing loans (NPLs) ratio stood at 1.37% as at 31 December 2019, a ratio that was lower than the 2018 ratio of 7.43% and below the Bank’s target of 5% by 31 December 2019.

The decrease in the NPL ratio was largely due to aggressive collections and stricter credit underwriting standards.

Meanwhile, the Group said total assets decreased by 37% from ZWL3.2 million in 2018 to ZWL2 million in 2019 mainly due to an 85% decrease in investment securities, a decrease of 30% in cash and cash equivalents and a 46% decrease in loans, advances and other assets.

“These reductions were partly offset by a 77% increase in investment properties and a 207% increase in property and equipment.”  Reads part of the statement.

The Chairman, Mr Benedict Chikwanha also said the 67% reduction in gross loans and advances to ZWL533.1 million in 2019 from ZWL1.6 billion in 2018 is reflective of the reduction in the value of monetary assets as a result of the hyperinflationary environment.

During the period under review, NMB said the bank launched the TapCard in collaboration with a technical partner and the product has been well received in the market as it has brought convenience to clients conducting low value transactions.

Chikwanha also said, “The bank opened the Victoria Falls service centre during the period under review for the convenience of the Bank’s Victoria Falls customers and tourists.

“The construction of our Head Office along Borrowdale Road was successfully completed and we anticipate to occupy the building before the end of the first half of 2020.”’

On the outlook, the bank said it has embarked on a digitilisation trajectory marked by the introduction of paperless low-cost account opening and it will continue to focus on operational efficiencies and service excellence across all market segments.

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