NMB says broadened group structure to drive future growth

HARARE – NMB Holdings unveiled its strategic roadmap for the next three years, built on four key pillars designed to drive growth and innovation. With a focus on expansion, differentiation and competitiveness, the group aims to empower businesses to thrive on a larger scale. Additionally, NMB will explore regional integration opportunities and harness the potential of next-generation technologies.

The company, which three years ago only had the holding company and the bank, has managed to transition to having a property company, a technology business called X-Plug and a microfinance division.

Speaking at the group’s AGM yesterday, CEO Gerald Gore said the transition is a way of minimising risks associated with the banking sector. “We have succeeded in broadening the group structure as a means of managing risk.”

Despite headwinds in the operating environment, Gore reported that the company recorded a 5% growth in assets and 13% increase in lending on the back of improved lines of credit in the first quarter. Deposits grew by 105%, and in terms of revenue mix, transactional income was at 4%.

The property company total assets are at US$10.6 million. The company has diversified into the property business in a bid to raise more capital and drive expansion investments. Recently, the company spent over US$4 million on the just completed Marlborough development, which consists of 26 cluster units.

Gore highlighted that of the 26 completed cluster units, 20 units have been already been taken up by tenants due to the high demand in the sector. “We are only left with six units on the market,” Gore added that the company has witnessed increased demand for property over the past year.

In a bid to meet sectorial demand the company invested US$3.6 million into 18 duplex units on the recently completed 45 Marlborough project which is currently on the market.

The company is set to spend US$27 million on a new project in Borrowdale which was recently approved. The project will be a mixture of townhouse and flats. Gore said the project has already gotten approvals, “but “we’re changing the concepts and the designs. So we’re having to go back to get the approvals for the alterations.”

Adding on he said the financial model of the project is now in place, “we’ve already put a security perimeter wall on the premises. So once we get the approvals, definitely before Q3, we should be starting construction.” Gore said the company would sell the units both in cash and in mortgages. “What we’ve been doing is a way of managing and addressing the housing backlog. There is not sufficient or appropriate funding for mortgages. However, when we develop a project —it becomes easier to offer mortgages based on that investment,” said Gore.

The company highlighted that they have serviced land in Chinhoyi, Bulawayo and Glenview which is currently being sold on mortgages. “We’ve been selling properties on mortgages, where someone pays a 25% deposit and then we give them five years to pay. We have only left 100 stands in Chinhoyi that are currently being sold, we have stands in Bulawayo. We have some stands in Glenview, which are all being sold on mortgages.”

The bank is currently negotiating a US$65 million line of credit with two international financiers which is aimed at financing the key sectors of the economy which include agriculture, mining and exporting business. “We are currently in negotiations with two funders for an additional $65 million, which is at level at documentation stage,” said Gore.

Currently the bank is sitting on US$ 109 million lines. The company said 75% of the lines of credit have been already drawn down into different sectors. “We’ve got a pipeline to consume the entire amount, but what has been drawn down is slightly under US$5 million.”

The company gained 44 000 active customers, which is in line with the central bank initiative of financial inclusion agenda. The bank highlighted that the active customers have gotten access to credit. “To ensure that everyone gets access to credit, 30% of the loans were issued to women or women-run businesses.”

The company said it is expanding its regional footprint using the power of technology under the Xplug which was recently launched. “The technology business has made inroads into Africa. That was the initial intention, to say we want to use our tech to help digitise Africa. So far, Xplug has been established in six African countries. It is currently working with two banks in Tanzania and a bank in Rwanda, which is among the top three banks there. A bank in Uganda, which is among the top five banks,” said Gore.

NMB CEO Gerald Gore and chairman Pearson Gowero-finx