Nedbank Zimbabwe increases industry support
NEDBANK Zimbabwe, which is upbeat about growth prospects this year, says it will continue to support the economy’s productive sectors through increased loan advances at a time many financial institutions have adopted a cautious lending position.
This comes as Zimbabwe’s economy is projected to grow by 7,8 percent this year driven by strong output from agriculture, massive public construction projects and attractive global mineral prices, among others.
During the period to June 30, 2021, the bank’s loans and advances grew to $2,3 billion compared to $1,6 billion during the same period last year.
“Loans and advances grew by 37 percent as the bank sought to extend credit to support industry,” Sibongile Moyo, the bank’s managing director, said in the company’s half year financial results.
Mrs Moyo said the bank will continue to deploy deposits in quality earning assets and through hedging strategies to preserve capital.
“We look forward to a rebound in gross domestic product (GDP) growth in 2021 as the nation rolls out an effective vaccination programme against the novel coronavirus that will have a positive impact on our clients and their businesses.
The bank will continue to adapt to the changing environment as we strive to deliver leading client experiences to the market and to support our clients,” she said.
During the period under review, the Bank achieved an after tax of $227,7 million and total comprehensive income of $325,1 million while operating income for the period was $1,6 billion buoyed by a 108 percent increase in non-funded income from digital channels including point of sale acquiring, and 97 percent increase in fees, commissions, trading and dealing income.
“Net interest income grew by 119 percent over the comparative period on the back of increased loans and advances as well as an upward review of Minimum Lending Rate (MLR) by the Bank in April 2021,” Moyo said.
She said total revenue decreased by 17 percent due to a 92 percent reduction in unrealised foreign exchange gains which contributed 64 percent of total revenue in the prior year.
Revenue from customer transactions grew by 101 percent compensating the reduction in nrealised foreign exchange gains due to relative stability in the local currency interbank exchange rate over the comparative period.
The bank’s total expenses decreased by 4 percent to $1,3 billion due to the decrease in the monetary loss charge as the year-on-year inflation rate slowed down to close at 101 percent at end of June.
“Other operating expenses have however, increased significantly driven by staff remuneration, technology, premises costs and Covid-19 induced expenditure to ensure a safe working environment,” Moyo said.
On meeting the revised capitalisation levels for Tier 1 and Tier 2 banks, the Bank said it has assessed its ability to meet the revised minimum capital requirements in the face of the impact of Covid-19.
“The Management is hopeful that the bank will get a positive response from the Reserve Bank on its capital plan which is supported by the major shareholder,” Moyo said.
The capitalisation levels are local currency equivalent of US$30 million and US$20 million respectively by December 31, 2021.
Nedbank Zimbabwe is majority owned by South Africa’s Nedbank Investments Africa and was formerly known as MBCA Bank, until 2018.-ebusinessweekly.l.z
