BUSINESS REPORTER
NMBZ Holdings Limited’s profit for the six months to June 30, 2021, plummeted 83% to ZWL$245.4m from ZWL$1.4bn reported in the prior comparative period on the back of an increase in operating expenses and a drop in operating income.
The group’s operating income declined to ZWL$2bn from ZW$2.5bn reported in the prior comparative of the same period last year.
Operating expenses jumped 89% to ZW$1.3bn from ZW$677m recorded during the six months in the same period last year attributed to increased transactional volumes in line with the bank’s digital drive as well as increased administration and operational costs.
“The pandemic has, without a doubt, created a difficult operating environment due to the unprecedented and pervasive nature of this global crisis. I am however pleased to report that in spite of these challenges, the group managed to achieve a satisfactory performance as a result of my team’s diligence and commitment to duty,” group chief executive officer, Benefit Washaya said.
Core banking income increased by 71% to ZWL$2.1bn from ZWL$1.2bn.
The group recorded an impairment credit charge on financial assets measured at amortised cost amounting to ZWL$81m compared to a charge of ZWL$52m during the period under review due to a growth in the banking subsidiary’s financial assets and a more conservative provisioning approach in light of the possible impact of Covid 19 on the operations of its borrowing customers.
The bank’s non-performing loans (NPLs) during the period closed at 0.63% compared to the 0.44% recorded at December 31, 2020, due to aggressive collections, stricter credit underwriting standards and growth in the loan book.
Total assets for the group stood at ZWL$14bn from ZWL$12bn as at December 31, 2020.
Gross loans and advances increased by 67% to ZWL$4.9bn from ZWL$2.9bn as of December 31, 2020.
Total deposits increased 22% to ZWL$9.1bn from ZWL$7.5bn mainly driven by aggressive deposit mobilisation and the positive impact of digital platforms.
The bank maintained a sound liquidity position with a liquidity ratio of 44.15% which was above the statutory minimum of 30%.
Washaya said the banking subsidiary maintained adequate capital levels to cover all risks as reflected by a historical cost capital adequacy ratio of 29.41% compared to 43.78% of December 31, 2020.
The group’s shareholders’ funds and shareholders’ liabilities increased 5% to ZWL$4.9bn from ZW$4.7bn as of December 31, 2020, as a result of the current period’s total comprehensive income.
The bank’s regulatory capital as of 30 June 2021 was ZWL$2.7bn in historical cost terms and was above the minimum regulatory capital of ZWL$25m. The bank submitted its updated capitalisation plan to the RBZ in terms of the requirements for a Tier 1 bank to have a minimum Zimbabwe dollar equivalent of US$30m by December 31, 2021.
As at June 30, 2021, the banking subsidiary’s regulatory capital had exceeded the minimum of US$30m required by December 31, 2021, on the back of the bank’s strong financial performance in the period under review.
The banking subsidiary owed US$13.8m to various lines of credit providers as at June 30, 2021, and had registered these foreign debts with the Reserve Bank of Zimbabwe as required by the regulatory directives.
