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NMBZ Holdings expects its June 30 half-year performance to be better than last year’s and its 2017 performance to surpass that of 2016, barring a significant deterioration in the economy, its chief executive, Mr Benefit Washaya, said yesterday.
Addressing the group’s annual general meeting, he said operating income for the four months to April 30 this year was down eight percent when compared to the same period last year.
“However, when we compare month on month performance, our April 2017 income was five percent higher than the comparative period last year,” he said.
He said operating expenses for the four months to April 30 had increased by two percent, due to a once-off staff rationalisation cost, without which costs would have gone down by two percent.
Through leveraging on its strong shareholder base, NMB Bank had secured a syndicated $15 million credit line from two European development financial institutions which was available for draw down by exporting customers.
“In addition on 17 May 2017 a regional finance house approved a five million dollars line of credit for us and the line will shortly be available for draw down by productive sector clients, including SMEs (small to medium-sized enterprises),” he said.
He added that there was $40 million available to exporters that was still to be drawn down.
Mr Washaya said the operating environment continued to be challenging.
“Dwindling aggregate demand, company closures, retrenchments, nostro and cash challenges are some of the factors putting pressure on borrowing customers.
“There is, however, a big relief brought about by the good 2016/2017 agricultural season, due to good rains and the government’s agricultural interventions in the current season.
“The likely impact of this will be improved inflows from tobacco and less pressure on grain imports,” he said.
He said that, cognisant of the tough operating environment, the bank continued 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 bank,” he said.
He said the bank had continued to deploy more point of sale (POS) machines to address the prevailing cash challenges and provide transactional convenience for its clients.
Transactional volumes had increased phenomenally on all the bank’s e-channel platforms. A commensurate increase in digital banking income had been recorded.
Mr Washaya said NMB was still targeting being a Tier One bank with a capital level of $100 million by 2020. As at April 30, its core capital stood at $51,4 million. The regulatory minimum was $25 million.
He said that most of the bank’s customers had dismissed a malicious hoax message about the bank circulating on WhatsApp last year but it had triggered panic in some customers.
As a proactive response the bank had launched a social media strategy. The bank now had a presence on Facebook, Twitter, Linked-In and WhatsApp.
It had implemented an integrated call centre system that enabled customers to send queries via Facebook, email, Twitter and the NMB web-site and track resolution of their queries.
The system also allowed the bank to monitor all mentions of the bank across all social media channels, he said.
Total deposits in the four months to April 30 went up by two percent, with 58 percent of the total amount being cheaper demand deposits. Loans and advances declined slightly by one percent. The cost to income ratio improved to 73 percent compared to 75 percent for the same period last year.
“Barring a significant deterioration in the economy, we expect 2017 to surpass the 2016 performance, as we are currently operating above our profit-after-tax budget,” Mr Washaya said.