NMB draws down US$50m credit lines

LIVINGSTONE MARUFU

NMB Holdings says its banking unit is on track to draw down US$50m from offshore credit lines, with the funds earmarked for on-lending to the productive sectors of the economy.

The move comes as local deposits remain stagnant, leaving banks unable to fully meet rising demand for credit.

In 2024, the group secured over US$65m in direct funding and trade finance limits from offshore Developmental Finance Institutions (DFIs).

In a statement accompanying half-year results for the period ended June 30, 2025, group chief executive officer Gerald Gore said the banking franchise had performed strongly, with customer numbers rising and penetration deepening in key sectors such as mining, agriculture, tourism and manufacturing.

“Our foreign credit lines utilisation has grown steadily, supporting clients’ long-term financing needs. We are in the process of drawing down on a US$50m line of credit which was concluded during the period under review.

Except for a few companies which have fallen into distress and are being managed, asset quality remains strong, supported by disciplined credit practices and proactive risk management,” Gore said.

The foreign lines are being channelled mainly to exporters and other productive enterprises, where demand for capital continues to exceed the industry’s capacity. Looking ahead, the group is targeting to secure more than US$100 million in additional offshore credit.

The strategy has already driven loan book growth, which rose 18% to ZWG3.4 bn by June 30, 2025, from ZWG2.9 bn at the end of 2024.

This expansion fed into earnings, with operating income for the period reaching ZWG915 m, compared to ZWG1.2 bn in the prior period. Comprehensive income climbed to ZWG98.9 m, up from ZWG56.1 m a year earlier.

However, one-off restructuring costs weighed on profitability.
“Restructuring expenses of ZWG138.5m were incurred during the year, primarily related to a change in strategic focus towards a digital and more efficient operation. These costs include severance payments and other termination costs. We expect these restructuring efforts to result in future cost savings and improved operational efficiency,” Gore said.

The restructuring programme, completed in the first half of 2025, included a staff retrenchment exercise designed to streamline operations, cut costs and improve productivity.

Gore acknowledged the process carried “short-term costs” but stressed it would “yield significant benefits in the future.”

As a result, profit after tax fell 39% to ZWG77.75 m for the six months to June 2025, compared to ZWG127.20 m a year earlier.

Despite this, the balance sheet remained solid.

Total assets grew 6% to ZWG7.8 billion from ZWG7.4 bn in December 2024, supported by stronger customer deposits.

Loans and advances increased to ZWG3.4 bn from ZWG2.9 bn, largely reflecting the deployment of offshore funds to exporting companies.

“Our focus remains on maintaining a robust credit risk management framework to ensure a sustainable quality portfolio. The bank maintained a sound liquidity position throughout the year and was consistently above the statutory minimum of 30%,” Gore said.

Alongside credit mobilisation, NMB invested heavily in modernising its branch network.
“NMBZ invested significant capital in refurbishing bank branches, and modernising infrastructure to better serve our clients. Branches that were refurbished and reopened during the period include Bindura and Kwekwe branches, where we moved to bigger premises, and Msasa Branch which now has a modern look and feel.

Work is underway to refurbish our MTA centre in order to expand services to our MTA customers and those in Harare Central Business District,” Gore said.

Beyond core banking, the group also strengthened its real estate arm. An 18-unit cluster housing project was completed in 2024 and brought to market, while construction is underway on a new cluster development in Marlborough.

In the industrial segment, NMB Properties is planning a 2,500-square-metre warehouse development.

“This diversification underscores the group’s ability to capitalize on opportunities across the property market.

Through strategic partnerships, NMB Properties continues to position the Group for sustained growth and value creation in Zimbabwe’s real estate sector,” Gore said.

Looking ahead, the group said it is well-positioned to support growth in key sectors, leveraging its balance sheet and offshore credit facilities to provide long-term funding.