Strong revenue growth underpins NBS’s US$2.7m core system upgrade
THE National Building Society (NBS) has reported a significant 335 percent growth in net interest income for the year ended December 31, 2024, compared to the prior year. This growth, driven by a 27 percent increase in loans against a reduced cost of funds, underpins the institution’s strategic investments, including a US$2.7 million project to upgrade its core banking system.
Managing director, Mr Sifiso Mahlangu, in a statement accompanying the financial results, highlighted that the core system upgrade is expected to go live in the second quarter (Q2) of 2025. This investment, he noted, is a key part of the group’s efforts to transition to becoming a fully digitalised financial services institution.
“The upgraded platform will bring operational efficiencies and improve the quality of customer experience,” Mr Mahlangu stated.
Despite subdued non-funded income during the period due to reduced sales of housing stock, NBS demonstrated strong financial management. The institution’s enhanced deposit mobilisation efforts led to a growth in deposits to ZiG2.392 billion, allowing NBS to increase its wallet share of USD-denominated assets and liabilities in response to market currency shifts.
Furthermore, NBS effectively managed credit risk, with impairment costs reducing by 15 percent from ZiG37.1 million in 2023 to ZiG20 million. “This reduction demonstrates the effectiveness of credit control measures the Society has put in place, which has resulted in the Society restricting its NPL ratio at a commendable level of 1.35 per cent, against an industry benchmark of 5 per cent,” Mr Mahlangu explained.
The cost-to-income ratio, reflecting strong revenue growth and tight cost control, stood at 29 percent in inflation-adjusted terms and 26 percent in historical terms.
Looking beyond financial performance, Mr Mahlangu emphasised NBS’s commitment to national development goals.
He stated that the Society’s efforts in mortgage financing, housing and serviced stand delivery, as well as its financial inclusion drive through the newly launched Lenderspark Finance microfinance subsidiary and the opening of new branches in Bindura and Chiredzi (expanding the footprint to 10 branches), are directly aligned with Vision 2030’s emphasis on decent housing and accessible financial services.
In its contribution to the national housing stock, NBS delivered 723 serviced stands in Batanal (Chinhoyi), 64 residential flat units in Glaudina (Harare), and 236 housing units in Rangemore (Bulawayo) during the year under review.
The Society has also lined up various projects for execution in 2025 across the country, with housing units and stands planned for Mathendele (Plumtree), Glaudina (Harare), Newmara (Mutare), and Runyararo (Masvingo).
Mr Mahlangu reiterated that NBS will continually seek opportunities to promote sustained and inclusive growth that complements Zimbabwe’s development objectives embodied in the country’s National Development Strategy 1 (2021-2025).
-herald
