NMB Bank Limited says it will focus on supporting financially some selected key sectors of the economy as part of its envisaged growth trajectory.
During the period to June 30, 2021, the bank’s gross loans and advances increased by 67 percent to $4,9 billion from $2,9 billion as at December 31, 2020 mainly due to increased advances during the period under review in view of the bank’s growth trajectory.
“The Group, through its banking subsidiary remains committed to financing the education sector, agriculture, health, water, property and construction as well as supporting the Small and Medium Enterprises (SMEs), the youths, the disadvantaged, vulnerable groups in addition to supporting various environmental conservation initiatives,” Benefit Washaya, the group’s chief executive said in a statement of the financials.
The bank’s growth trajectory is premised on a thrust to focus more on its core activities as opposed to focusing more on value preservation initiatives.
“During the period under review, the group’s operating income largely arose out of the banking subsidiary’s core operating activities, with core operating income excluding fair value losses on trade investments constituting slightly over 100 percent of total income,” Washaya said.
The bank’s non-performing loans (NPLs) remain very low, with the NPL ratio closing the period to June 30, 2021 at 0,63 percent compared to the 0,44 percent recorded at 31 December 2020.
“The low NPL ratio is largely due to aggressive collections, stricter credit underwriting standards and growth in the loan book,” he said.
The group’s total assets increased by 15 percent from $12 billion as at 31 December 2020 to $14 billion as at 30 June 2021 mainly due to a 36 percent increase in loans and advances and other assets and a 14 percent increase in cash and cash equivalents.
Total deposits increased by 22 percent to $9 billion from $7 billion at 31 December 2020 as a result of aggressive deposit mobilization and the positive impact of digital platforms.
Washaya said the group continued with the banking subsidiary’s digitalisation drive which resulted in the rolling out of more customer centric products.
He said during the period under review, the bank launched five disruptive digital products namely, a Virtual Branch that allows customers to conduct cash transactions on their phone and simply walk into the branch to either drop or pick cash.
The others include an automated loan application that allows customers to apply for personal loans on short code and access near instant disbursements without the need to complete any paperwork and an instant NMBLite account opening through short code.
“Furthermore, the bank has completely digitized its internal operations, which has resulted in the complete elimination of paper in our internal processes. This also complemented our virtual branch, which has also completely removed the need for paper and form filling across our branch network,” Washaya said.
During the period under review, the Bank maintained a sound liquidity position with a liquidity ratio of 44,15 percent which was above the statutory minimum of 30 percent.
Washaya noted that the banking subsidiary maintained adequate capital levels to cover all risks as reflected by a historical cost capital adequacy ratio of 29,41 percent as at 30 June 2021 compared to 43,78 percent in December 2020.
The Bank’s regulatory capital as at 30 June 2021 was $2,7 billion, in historical cost terms and was above the minimum regulatory capital of $25 million.
Washaya said the Bank submitted its updated capitalization plan to the Reserve bank of Zimbabwe (RBZ) in terms of the requirements for a Tier 1 bank to have a minimum Zimbabwe dollar equivalent of USD30 million by 31 December 2021.
Washaya noted that as at 30 June 2021, the Banking subsidiary’s regulatory capital had exceeded the minimum of USD30 million required by 31 December 2021 on the back of the Bank’s strong financial performance in the period under review.