NMBZ shut down branches

LIVINGSTONE MARUFU

Dual-listed financial services group, NMBZ, has shut down four of its branches across the country as the financial institution rationalises its business model and embraces digital transformation in response to tough operating environment.

The closure comes at a time financial institutions are embracing digitisation as they reduce reliance on the brick and mortar business.

The lender, which has its primary listing on the Zimbabwe Stock Exchange and also trades its shares on the London Stock Exchange, closed the Eastgate, Chitungwiza and Kwekwe branches in the nine months to 30 September 2020.

 The Victoria Falls branch was closed subsequent to the review period.  NMB wants to bring various innovative products in an effort to decongest the physical branches to combat the spread of Covid-19 pandemic.

NMBZ secretary Shumirai Pashapa said in a trading update for the quarter ended September 30 that the group launched the NMBConnect suite of services which comprised NMBConnect Online, NMBConnect App and a USSD *241# and these digital platforms have been well received by the market.

“As a result of the digital transformation drive, the Bank closed the Eastgate, Chitungwiza and Kwekwe branches in the nine months to 30 September 2020 and the Victoria Falls branch was closed subsequent to the review period.

We are in the process of establishing an agency network throughout the country to facilitate physical touch points, in need, for potential and existing customers,” Pashapa said.

NMBZ moved its head office to the new home along Borrowdale Road in the quarter under review and the bank’s excellence branch, which was previously located at the Borrowdale Sam Levy’s Village, was moved to the new Head Office effective October 1 2020.

Pashapa said foreign currency auction system introduced by the Monetary Authorities in the last quarter on June 23 2020 recorded a steady increase in the volumes and values traded in the quarter under review.

An extension of the Foreign Currency Auction System was introduced during the review period to accommodate Small to Medium Enterprises and individuals whose bids fall below the minimum limits set for the main auction.

The foreign currency auction system and the other monetary and fiscal policy interventions in the period have resulted in the stabilisation of the country’s foreign exchange market, with the Zimbabwe dollar firming against the USD towards the end of Q3 2020.

The stabilisation in the currency markets resulted in a reduction in the month-on-month inflation during the quarter under review, with the month-on-month inflation rate closing at 3.83% for 30 September 2020, down from the 31.66% in June 2020.

Total income for NMBZ grew 222% in the nine months to September 30, 2020 compared to the corresponding period in 2019.

This is in spite of the overall challenging operating environment and the adverse impact of Covid-19.

The group’s profit after tax went up 5.6% to ZWL$740.1m during 2020 Q3 from ZWL$700.608m recorded during the same period last year.

The bank’s regulatory capital as at  September 30 2020 of ZWL$2.8bn  was above the minimum required regulatory capital of ZWL$25m  and translated to a capital adequacy Ratio of 36.70% (31 December 2019 – 39.49%) which was significantly above the prescribed regulatory minimum ratio of 12%.

In the quarter under review, the RBZ extended the compliance deadline to December 31 2021 in respect of the new minimum capital threshold of the Zimbabwe dollar equivalent of US$30m for banking institutions with a Tier 1 status.

The bank remains committed and focused on achieving the required minimum capital level for a Tier 1 bank by the set deadline.

As a group, the group is not anticipating any further significant adverse impact on performance on account of the Covid-19 pandemic.

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