Listed financial services group NMB Holdings has reported a 532 percent jump in after tax profit to ZWL$57.4 million in the first half of 2019 buoyed by net foreign gains and other income from fair value gains.
NMB chief finance officer Benson Ndachena said last week that the net foreign exchange gains grew 2 844 percent to ZWL$32.7 million while other income, coming out of fair value adjustments and increased bad debts recovery, went up 1909 percent to ZWL$29.9 million.
Other comprehensive income of ZWL$4 million brought the group’s total comprehensive income at ZWL$61.4 million. Impairment reversal or losses on loans and advances contributed ZWL$943 000 which was 166 percent up on same period prior year. Net interest income for the period went up 11 percent.
However, operating expenditure was up 42 percent to ZWL$24 million. Ndachena said administration costs were up 50 percent largely due to the effect of foreign denominated costs while staff costs were up 31 percent due to the activities carried out to increase account numbers and adjustments to salaries. “Depreciation and amortisations were 69 percent up due to increased capex and depreciable assets and depreciation on right-of-use assets,” Ndachena said.
The group’s basic earnings per share was ZWL$14.55 cents for the half year ended 30 June 2019 compared to ZWL$2.34 cents per share for the half year ended 30 June 2018.
“The basic earnings were largely driven by the continued expansion into the broader market segments, revision of lending rates and charges, reduction in NPLs, cost containment measures, functional currency changes and fair value gains from investment properties,” CEO Benefit Washaya said.
Washaya said NMB’s non-performing loans (NPL) ratio stood at 3.38 percent at June 30 2019 down from 7.43 percent recorded as at December 31 2018.
“The reduction of the NPL ratio was achieved through aggressive collections and stricter credit underwriting standards,” Washaya said, adding, “the management of NPLs continues to be a focus area in light of the deteriorating operating environment and the increasing borrowing interest rates.”
Giving a strategic outlook, Washaya said the group owes US$14 million to various line of credit providers, an equivalent in local currency of which has been transferred to the RBZ.
“We have engaged the affected providers and they are agreeable to the legacy debt arrangements with the RBZ,” he said.
Washaya said construction of the group’s new head office is progressing well and should be completed by year end.