Nedbank Zimbabwe Audited Condensed Financial Statements for the Financial Year ended 31 December 2020 highlights

Harare, 30 March 2021 – Nedbank delivered strong financial performance with substantial growth in operating income and profitability and displaying resilience in a challenging operating environment in 2020.

Highlights:

§  Led banking industry Brand Sentiment in 2020 due to client engagement

§  Operating income grew to ZWL 3.4 billion outpacing in inflation terms ZWL 2.9 billion in prior year

§  ZWL 1.1 billion historical profit total comprehensive income in 2020 against ZWL 198 million in 2019

§  Reversed 2019 loss to achieve inflation adjusted total comprehensive income of ZWL 159 million from ZWL 761 million loss

§  ZWL 14.2 billion total balance sheet size from ZWL 12 billion, 18% growth inflation adjusted

§  453% Deposits growth in historical terms to ZWL 11.3 billion from ZWL 2.0 billion in 2019 and 23% deposit growth in real terms inflation adjusted

§  ROE – Return on Equity increased to 135% from 118% over prior year 2019 in historical terms

§  Cost to income ratio 43.1% in historical terms

§  Strong liquidity ratio 108% against 30% prudential limit

§  Capital Adequacy Ratio of 22% against 12% prudential limit with

§  Shareholder equity of ZWL 1.4 billion equivalent to USD 17 million

§  62% Interest earning assets to local currency ZWL deposits in loans and Government securities

§  29% reduction in net monetary loss in 2020 from 2019 with balance sheet monetary in nature

§  Credit relief extended to individuals and companies with business impacted by COVID-19

§  Operating performance underpinned by non-interest income NIR and cost optimisation:

•         Customer base and accounts growth with remote onboarding via digital

•         Digital platforms transactions volumes growth

•         POS point of sale value growth to 2nd place market share of all Zimswitch transactions

•         Increased upsell and cross-sell of products and services

•         Foreign exchange dealing and translation gains

•         Cost optimisation with 12% inflation adjusted reduction in operating expenses

§  Digital Solutions rolled out in 2020

•         USD multi-currency on internet banking, mobile banking and ATMs

•         Online account opening on website and mobile banking

•         Mobile wallet transfers from bank to all networks cell phone numbers

•         Remote issuing of debit cards

•         Bulk account opening

•         Refreshed new Nedbank mobile banking APP

•         Self-service online platform administration for corporate clients

•         API integration for real time bulk collections and payments for Corporate clients

•         Reg-Tech and analytics to enhance monitoring and compliance with FATF standards

•         Refreshed mobile banking solution with new & improved features and SME onboarding

“Digital touch points and technology investments made over the reporting period present a solid foundation for an agile business poised for growth”, said Dr Sibongile Moyo, Nedbank Managing Director.

“Our 24-hour contact centre was enhanced to handle high volume and complex of client requests, yielding positive results. Branch-level processes were centralised in middle office for seamless transactions and efficient client support around the clock. Branches continued to operate in Bulawayo, Gweru, Harare, Mutare, Victoria Falls and Zvishavane and seasonal service points in remote towns across the country. We will continue to operate seasonal branch service points in Bindura, Karoi, Marondera, Mvurwi and Rusape in 2021 for our clients’ convenience,” she added

Commitment to the Communities as money experts who do good saw the Bank being recognized for corporate social investment via the 2020 Banks and Banking Survey Sustainability Award. Nedbank contributed to COVID programs, youth empowerment, students in STEM programs and launched the Nedbank Youth Accelerator Program (YAP) to contribute to training young graduates in corporate work immersion skills. Environmental and sustainability projects included launching tree planting season with 600 indigenous trees and fruit trees planted in orchards at schools and orphanages in Bulawayo, Mutare, Victoria Falls and Zvishavane.

 “During the year we prioritized the health and safety of our stakeholders, wellbeing of our staff and their families with support through access to medical professionals, counselling services, fitness programs, discretionary allowances and medical equipment. Our teams demonstrated commendable commitment and resilience as they navigated a difficult operating environment to serve our clients”, said Dr Moyo.

“The directors assessed the Bank’s ability to meet the revised minimum capital requirements in the face of the impact of COVID-19. They are hopeful that the bank will get a positive response from the Reserve Bank of Zimbabwe on its capital plan which is supported by the major shareholder”, said Mr Shepherd Shonhiwa, the Chairman of the Board of Directors.

“Going forward we will continue to focus on our clients, the bedrock of our business by providing market leading client experiences. Management will seek to optimize the balance sheet in order to preserve capital via hedging strategies to reduce the impact of monetary losses”, concluded Dr Sibongile Moyo.