NMB steps up diversification to raise forex
Listed financial services provider NMB Bank saw its diversification drive implemented at a faster pace as the company reported that it will increase the bank’s foreign currency earnings.
In a statement accompanying results, NMB chief executive, Mr Gerald Gore said, “In pursuit of our exponential growth aspiration, the Group’s diversification thrust gathered momentum.”
This comes as the financial group now has a new subsidiary to add to the bank, namely the Property Development Company.
According to Mr Gore, the banking division also diversified its operations to set up a microfinance division with the aim of providing more focused services to individuals and micro businesses.
“A Technology Services division was also set up and is in various discussions with a number of banks in the region where we will become their technology partner to drive their digital transformation agendas,” he said.
NMB thinks that the group will be able to generate foreign currency from this as well. The bank has gained access to new markets thanks to the new subsidiary and divisions, which also have a clear strategy for how to become dominant leaders in their respective industries.
Mr Gore added that “Capital allocation was key and the new businesses were capitalised organically. All the Group’s subsidiaries are adequately capitalised and capacitated to pursue their strategic goals.”
The chief executive said that among the topics they gave proper attention to were developing their core banking business and geographic representation. As they added more billers, offered payment options like airtime and data purchasing, and launched an agency banking system, the banking industry continued to use technology to deliver services more effectively.
The innovation on agency banking enabled NMB to seamlessly onboard the Zimpost agency partnership and the banking subsidiary also increased its digital workforce as it deployed more robots largely in the accounts reconciliation space via its Robotic Process Automation section.
Mr Gore added that “The banking subsidiary is now focused on ensuring a comprehensive package of products is offered through the agency network for the convenience of customers. The main drivers for setting up these particular subsidiaries are income diversification, maximum utilisation of skills and capacity within the Group, efficient use of capital and value preservation.”
The bank hopes that all the subsidiaries will leverage the group’s digital capabilities and superior customer services.
NMB Bank in the period under review remained adequately capitilised and above the 12 percent capital adequacy ratio.
Benedict Chikwanha, the board chair of NMB in a statement said, “The capital adequacy ratio of the banking subsidiary remained strong at 25,29 percent compared to a regulatory minimum of 12 percent. The subsidiary maintained adequate capital levels to cover all risks and was compliant
with the minimum capital of the equivalent of US$30 million.”
In relation to blocked funds, the chairman said, “The banking subsidiary owed US$13,8 million to various lines of credit providers as of December 31, 2022.
In line with section 52 of the Finance Act no 7 of 2021, the Bank received Government-backed zero-coupon Treasury Bills amounting to US$9,6 million by December 31, 2022.
“The rest of Treasury Bills amounting to US$4,2 million were received subsequent to year-end.”
In their outlook, the group said it will focus on disciplined execution of its strategy which is anchored on broadening its structure and diversifying sources of income.
“The Group will leverage on technology to deliver robust digital platforms and effectively deliver convenient financial solutions to its customers,” said Chikwanha.
Raising credit lines remains a key focus area as the bank continues to fund export-oriented productive sectors of the economy as part of its drive to support the growth of the Zimbabwean economy.-herald
