NMBZ piles up govt commercial paper


Dual-listed financial services group, NMBZ Holdings Limited, more than doubled its portfolio of Treasury Bills (TBs) and bonds to ZWL$1.081bn in 2020 from the ZWL$480.7m reported in prior year as the financial services group seeks a safe haven in government paper, latest data has shown.

The development at the lender, which has its primary listing on the Zimbabwe Stock Exchange and also trade pockets of its shares at the London Stock Exchange, comes as the Government is in the market with TBs wanting to raise  more than ZWL$1bn.

The funds raised from the commercial paper, permanent secretary in the Ministry of Finance and Economic Development, George Guvamatanga said, are part of budgetary support announced by Finance Minister, Mthuli Ncube, in the 2021 National Budget Statement.

NMBZ board chairman, Benedict Chikwanha said the financial institution has been very active in the purchasing of the commercial paper from the primary and secondary markets.

The investment securities, he said, were mainly utilised in the productive sectors.

“…the bank has set maximum limits for investment securities in order to ensure that most of the funds are channelled towards the productive sectors of the economy,” Chikwanha said.

In its financial results for the year ended December 31, 2020, NMBZ’s profit more than doubled to ZWL$849.3m from ZWL$377.2m reported in the prior comparative period.

Operating income, however, declined to ZWL$2.1bn in the reviewed period from ZWL$3bn in 2019. Operating expenditure increased by 18% to ZWL $1.2bn from ZWL$1.07bn in 2019 due to staff rationalisation and Covid-19 related expenditure to ensure the safety of NMB Bank customers and staff and compliance with Covid-19 protocols.

Total assets for the bank increased 17% to ZWL$10.95bn during the reviewed period from ZWL$9.37bn in 2019 due to a 125% increase in investment securities, a 60% increase in investment properties and a 25% increase in property and equipment, Chikwanha said.

NMB total deposits increased by 17% to ZWL$6.26bn from ZWL 5. 34bn.

Investment properties increased to ZWL$1.65bn as at December 31 2020   from ZWL$1.03bn as at December 31 2019 due to additions and improvements made on the Bank’s property portfolio in line with the value preservation strategies adopted by the group to curtail the devastating effects of the prevailing hyperinflationary environment. 

Chikwanha said the lender aims to continuously strengthen its performance and create sustainability strategies anchored on financial inclusion, education, water, housing, construction, health, and climate.

The group, through its banking subsidiary, remains committed to financing the education sector, health, property, and construction, as well as supporting the SMEs, the youths, the disadvantaged, vulnerable groups in addition to supporting various environmental conservation initiatives, he said.

Chikwanha said support was extended to educational institutions and students in pursuit of supporting the education sector through advancing affordable loans. 

The bank also provided support in the construction and maintenance of roads, dams, and houses across the nation.

Furthermore, the bank extended funding to local authorities in a bid to ensure the provision of clean water and other critical amenities to residents.

He said the bank had also continued to provide mortgages for residential accommodation and commercial properties.

He said the NMB’s digital strategy had been launched at the most opportune time and been instrumental in driving business within the Covid-19 circumstances.

The bank had recorded significant growth, expansion, and improvement in its digital platforms, resulting in enhanced service delivery. 

Chikwanha said the bank adopted a number of value preservation strategies in response to the prevailing hyperinflationary environment in order to ensure shareholders’ value was not eroded.

“These measures culminated in the group’s remarkable financial performance in spite of the difficult operating environment,” he said.

The bank’s capital adequacy ratio stood at 52.56%, above the minimum statutory requirement of 12%, and adequate to cover all risks and to support the underwriting of new business.

Its regulatory capital stood at ZWL$2.1bn as of December 31, 2020 well above the minimum regulatory capital requirement of ZWL$25m.

This gave the bank confidence in its bid to meet the revised minimum capital of the ZWL$ equivalent of US$30m for a tier-one bank by December 31 2021.

The bank’s non-performing loans ratio continued to come down as it stood at 0.44% at the end of December 2020, compared to 1.37% at the end of 2019.

The bank continued with its financial inclusion drive, he said.

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