Banking firm, NMBZ Holdings Limited’s operating income for the four months to 30 April, 2019 was 22,7 percent below budget as the company experienced a slowdown in business during the quarter.
During the first quarter of the year, business across the economy was affected by policy uncertainties.
During the same period, the Reserve Bank of Zimbabwe (RBZ) governor Dr John Mangudya, introduced the interbank foreign currency market, as set the RTGS$ as functional currency for the country.
Inflationary pressures on the back of rising foreign currency rate on the illegal parallel market also added to business woes.
Resultantly, net interest and non-interest income for the four months under review were 7,2 percent and 21,6 percent below budget respectively, which contributed to a slowdown in operating income.
The banking group recorded a 17,5 percent increase in transactional volumes for the period between February and April although business experienced a slow start beginning of the year on economic volatility.
During the four months under review, a net US$ asset position resulted in translation gains and total comprehensive income which was above budget.
Operating expenses rose 36,7 percent
year on year as a result of the inflationary pressures. Bad and doubtful debts charges were 12,1 percent below budget as asset quality improved.
As at April 30, 2019, non performing loans (NPL) ratio was at 7,32 percent, an improvement from 7,46 percent recorded in December 2018.
The banking group has indicated its continued focus on digitalization in line with current market trends as banks are going digital and emphasizing on plastic money in response to cash shortages that started in 2016.
Service providers across the economy have also embraced electronic payments as opposed to cash transactions as the shortages continue.
NMB is also shown interest in the mass market. Recently, the banking group launched a Near Field Communication (NFC) card — the Tap-and-Go Card that will be used for low value transactions as it seeks to boost non-funded income.
In line with digitalisation programme, the banking group distributed 6 514 point of sale machines into the market with the small to medium enterprises especially in the informal sector being their main target.
Management at NMBZ remain upbeat the digital banking services will continue to present opportunities for growth in the financial services sector and anticipate an equal split in total income between interest income and non interest income.
Market watchers are of the view the bank will cash in on the improved transaction volumes while revision of service fees and interest rates should benefit the banking sector.