NMB forges ahead with regional foray

Zimbabwe Stock Exchange (ZSE) listed banking group NMBZ Holdings continues to implement strategies to diversify operations and extend its reach in foreign markets.

The bank has been working on strategic expansion into Southern and East African markets through its Xplug division, which is deemed a major milestone in its business growth.

NMBZ chief executive officer, Gerald Gore said in a statement accompanying the group’s half-year results for the period ended June 30, 2024, said, “Xplug Solutions continues to make inroads in Southern and East Africa, offering robotic process automation (RPA) solutions, as well as mobile and internet banking development services.”

He said the company was expanding its revenue sources and now offered an SMS gateway platform for businesses needing bulk messaging services.

In the software development space, the firm has developed a fully functional medical aid system which is now in full deployment.

“The subsidiary is now profitable, one year after its launch. Xplug Solutions continues to pursue various partnerships in the digital ecosystem to meet the demand of its customer base,” Mr Gore said.

Another newly set up division, NMB Properties has been focusing on completing key projects under its management, including the 18-cluster development, which is nearing completion.

“NMB Properties, in collaboration with several partners, has a project pipeline that includes cluster home developments, residential stands, and a shopping center,” Mr Gore added.

According to the bank, this positions the group on course for sustained growth in the real estate sector.

Further, the group has set its eyes on new markets both locally and regionally with Xplug Solutions already doing work in Southern and East Africa.

NMBZ’s traditional divisions continue to perform well delivering essential convenience to its customers.

As for financials, total assets closed the period at ZiG 3,5 billion, down from ZiG 3,9 billion for the comparative period.

The reduction in assets is due to a decrease in the value of some of NMBZ’s investment properties, according to the company chairman, Pearson Gowero.

The first half of the year saw challenges in the banking book, primarily due to the volatile environment present in the initial quarter.

The bank later secured new funding from several funders, part of which has already been allocated, including US$10 million from British International Investments.

“This new funding will propel growth in the second half of the year,” added Mr Gowero.

Loans and advances stood at ZiG 1,1 billion as of June 30 2024, down from ZiG 1,2 billion as of December 31, 2023.

This was partly due to the recalibration of the local currency book following the change of currency and the exchange rate deterioration that took place in the first quarter of the year.

In the period under review, the NPL ratio stood at 1,2 percent, a slight decline from 1,1 percent as of December 2023.

“The bank continues to exercise prudent loan underwriting and rigorous monitoring to ensure risk is effectively managed,” according to the chairman.

Throughout the period, the bank maintained a robust liquidity position, consistently exceeding the required minimum of 30 percent.

NMBZ says its capital remains robustly anchored on US dollar-denominated assets.

The capital adequacy ratio of the banking subsidiary remained strong at 34,45 percent compared to a regulatory minimum of 12 percent.

The group’s banking subsidiary remained adequately capitalised to cover all risks and was compliant with the minimum capital requirement of US$30 million.

In the period under review, business banking remained relevant in its preferred market segments.

Mr Gore said the structuring of appropriate funding for the company’s clientele base remains an area of key strategic focus as the bank has several credit lines in various stages of assessment in the pipeline.

“New credit lines worth US$40 million have been approved bringing total foreign credit lines to US$98 million,” according to Mr Gore.

Foreign lines of credit with longer tenors played a pivotal role in strengthening our footprint in the agriculture sector as well as making inroads into mining and other key sectors.

This demonstrated a commitment to fulfilling the bank’s financial intermediation role within the economy to its diversified client portfolio.

The loan book quality remains strong with prudent underwriting methodologies supported by strict credit monitoring.

The microfinance division continued to grow its footprint across the market and this growth was primarily fuelled by asset financing loans provided to low-income customer segments.

“Business loans to micro-enterprises are also being prudently underwritten with a special focus on women-owned businesses.

“Significant progress was made in terms of digitising the lending operation for efficiency as well as customer convenience,” the company CEO said.

NMBZ declared an interim dividend of US dollar 0,31 cents per share.

Moving forward, the group aims to continue advancing with the implementation of its strategy despite any obstacles.

The group will continue to prioritise sustainability and the enhancement of client and stakeholder engagement.

“Fundraising initiatives will also be prioritised to ensure we can meet the evolving financial needs of our clients,” Mr Gowero said.-herald