National Building Society redeems value from its landbanks

National Building Society (NBS) a local financial institution has said it is now redeeming value from its strategic land banks dotted in the country.

According to Shingai Mutumbwa the board chairperson of NBS the bank has already begun development on the land banks improving the value of the said assets.

“The Society has begun to unlock value from its significant land banks namely Christmas Gift a land of 628 ha located in Gweru, has a planning work that is in motion whilst the servicing of Mathendele stands (6,4 ha) situated in Plumtree shall begin in the third quarter of 2024,” the chairperson said.

In line with the government Vision 2030 of an upper middle income economy, the Society has continued to develop residential houses in order to also meet its targets of affordable housing provision to the market.

Mutumbwa added, “In line with its key mandate to provide affordable housing, the Society, in partnership with the National Social Security Authority (NSSA) is developing and servicing 753 residential stands in Batanai, Chinhoyi and selling serviced stands in Glaudina, Harare.”

This comes as the Society’s acting managing director Sifiso Mahlangu said the institution recorded profitability gain of 284 percent to $73 billion in the period ending December 31, 2023.

“Profitability surged by over 200 percent in inflation-adjusted term totalling $73 billion, up from $19 billion in 2022,” Mahlangu said.

The acting managing director said whilst operating costs rose to $116 billion from $33 billion, their cost-to-income ratio dropped significantly from 46 percent in 2022 to 31 percent in 2023.

He further noted a growth of total assets from $265 billion to $522 billion which doubled the balance sheet as the growth in total assets was as a result of good relations with investors.

“Our Total assets grew from $265 billion to $522 billion, nearly doubling our balance sheet, a testament to the confidence and trust placed in NBS by our stakeholders,” said Mahlangu.

According to the chairperson, during the period under review, the Society exceeded RBZ regulatory requirements of a regulatory minimum capital level of US$20 million for building societies with a capitalization of US$22,4 million.

It was a notable change from US$18,3 million at the end of December 2022 making a difference of US$4,1 million.

“NBS closed the year with capitalization of US$22,4 million, surpassing RBZ’s regulatory minimum capital level of US$20 million for building societies, significantly up from US$18,3 million at the end of December 2022,” said the board chairperson.

This comes as the RBZ recently directed all banks and microfinance institutions not to declare dividends if they are not compliant with the core capital requirements.

Speaking during his much awaited debut Monetary Policy Statement (MPS), the RBZ governor, Dr John Mushayavanhu made it clear that meeting capital requirements for institutions under his watch was a priority.

“No banking institution or microfinance institution whose core capital is non-compliant with the prescribed minimum capital requirements shall pay dividends to its shareholders unless it has taken adequate steps to comply with prudential requirements, including capital adequacy, and has been approved by the Bank,” Dr Mushayavanhu said.

According to the banking sector regulations, large commercial and foreign banks (tier 1) are required to have a minimum capital of US$30 million, while tier 2 merchant banks, building societies, development banks, finance and discount houses should have a minimum capital of US$20 million.-ebusinessweekly