NMBZ to pursue growth strategy
HARARE- NMBZ CE, Benefit Washaya told the company’s Annual General Meeting this morning that, operating income plunged 8% at US$12,6 million during the first quarter of 2017 largely due to constrained lending on the back of growing liquidity challenges.
However when compared to month on month performance, the April 2017 operating income was 5% higher than the comparative period last year.
Operating expenses were up 2% mainly due to a once off cost in the period under review, without which costs would have gone down by 2%.
“Being cognisant of the tough operating environment, we continue to pursue a controlled growth path, bearing in mind the emerging risks. Our focus is on cost effective ways to deliver banking products to our customers in ways that ensure sustainability for both our customers and the banks,” said Washaya.
Washaya stated that, despite significant deterioration in the economy, the bank expected 2017 to surpass the 2016 performance as the financial institution is currently operating above profit after tax (PAT) budget.
NMBZ also revealed that a further US$5 million line of credit would be available after a regional finance house approved the facility for productive sectors, including small to medium enterprises.
Last year US$15 million was availed from two European development financial institutions DFIs.
The lines of credit compliment the bank’s efforts of improving its credit facility.
Total deposits during the first quarter shot up 2% to US$262. 4 million with 58% being cheaper demand deposits.
Loans and advances on the other end recorded a slight decline of 1% to close at US$202.3 million compared to the figure recorded as at December 31, 2016. During the period under review, NMBZ recorded an improved cost to income ratio for the four months to 73% compared to 75% during the same period last year.
Still to be ranked as a Tier 1 bank with a capital level of US$100 million by 2020, NMBZ is currently working towards improving its capital position. As at April 30 2017, the bank’s core capital stood at US$51, 4 million against the regulatory minimum of US$25 million.
“We will continue to target to grow our capital organically subject to a significant and sustained improvement in the operating environment,” said Washaya.
In effort to address growing liquidity challenges, NMBZ has continued to deploy more POS machines in the market although the costs of supporting a mass rollout have continued to soar.
The bank is currently evaluating cheaper alternative devices in order to improve market penetration.
The annual general meeting approved Directors’ fees at US$311, 430.
Enerst & Young won the bid to be the company’s Auditors for the next financial year ending December, 31, 2017 after KPMG completed its five year tenure.