NMBZ Holdings, NMB Bank’s holding company, recorded a profit before tax of $4 838 174 for the half-year ended June 30, 2017, resulting in total comprehensive income of $3 556 915.
This was an increase of 35 percent compared to the same period last year, when comprehensive income stood at $2 640 274. The group achieved earnings of 93 cents per share compared to 69 cents in the same period last year.
Briefing analysts today (Wednesday) on the group’s half-year results, NMBZ chief executive officer Benefit Washaya pointed out that this had been achieved despite a challenging economic environment characterised by nostro funding challenges, cash shortages, company closures and job losses.
He said the capping of interest rates to 12 percent per annum for the productive sector had an adverse impact on revenue but added that this development was necessary in order to promote exports by allowing the productive sector to enjoy competitive interest rates.
Total deposits at June 30, 2017, amounted to $273 478 790 compared to $249 205 508 on June 30, 2016, and $260 550 383 as at December 31, 2016.
Operating expenses were up one percent compared to the first six months of 2016 as a result of some non-recurring expenditures.
Shareholder funds increased from $55 600 406 at the end of December 2016 to $59 178 793, as a result of the total comprehensive income for the half year.
Mr Washaya mentioned that a transaction had been concluded last week whereby shareholders Norfund and FMO, having teamed up with Rabobank to pool their investments in Sub‑Saharan African financial service providers, had handed over their shareholding in NMBZ to their joint investment company Arise.
He said NMB Bank had started drawing down on a $15 million line of credit from two European Development Finance Institutions (DFIs). Mr Washaya stressed that this line is only available to exporting customers.
The bank’s capital adequacy ratio at 23,88 percent is substantially higher than the Reserve Bank’s minimum requirement of 12 percent, while its liquidity ratio, at 35,7 percent remains above the Reserve Bank’s minimum requirement of 30 percent.
Loans and advances were down two percent from $205 858 392 as at December 31, 2016, to $201 607 913 as at June 30, 2017, due to constrained lending as a result of the difficult operating environment.
The non-performing loans ratio came down from 11,1 percent as at June 30 2016 to 10,7 percent. Mr Wahaya said the bank was targeting a single digit ratio by the end of the year.
Total assets increased by five percent from $320 984 926 as at December 31, 2016, to $337 754 147 as at June 30, 2017.
NMBZ chief finance officer Benson Ndachena told analysts that fee and commission income at $7 892 196 had increased by 4 percent compared to the same period last year.
In his statement accompanying the unaudited accounts for the half year, NMBZ chairman Benedict Chikwanha, said the financial results were largely driven by NMB Bank’s expansion into the broader market segments, stricter credit underwriting standards and concerted efforts to contain non-performing loans and operating costs.