NMBZ Holdings pre-tax profit for last year amounted to more than US$27 million, an increase of more than 109 percent over the previous year’s pre-tax profit, which was just over US$13 million.
Profit before taxation for the year ending December 31, 2018, was US$27 143 275, while for the year ended December 31, 2017, it was US$13 017 690.
Profit after tax for 2018 was US$21 221 201 compared to US$9 938 826 the year before. Total comprehensive income for 2018 was US$21 267 632, an increase of 112 percent over the 2017 figure of US$10 029 136.
The group’s banking subsidiary, NMB Bank, achieved a capital adequacy ratio of 23,25 percent, well above the minimum required by the Reserve Bank of Zimbabwe, which is 12 percent.
The Bank’s regulatory capital as at 31 December 2018 was US$74 927 487, considerably higher than the minimum required regulatory capital of US$25 million.
Total bank deposits increased by 25 percent from US$348 956 385 as at 31 December 2017 to US$434 957 949 as at 31 December 2018.
In his statement accompanying the results, NMBZ chairman Benedict Chikwanha identified the main drivers of the financial results as NMB Bank’s diversification into the broader market segment, enhanced use of its digital offerings, stricter credit underwriting standards and containment of non-performing loans.
He said the increase in deposits was the result of strong deposit mobilisation strategies coupled with a significant improvement in the market.
Further investment, he said, was continuously being directed towards the digital channels to enhance service delivery and accommodate the increased transactional volumes created by the broadened customer base.
He said the bank continued with its intermediation role and support for the productive sectors as reflected by a 24 percent increase in gross loans and advances from US$211 005 418 as at 31 December 2017 to US$262 335 026 as at 31 December 2018.
The bank had set maximum limits for investment securities to ensure most of its funds are channelled towards loans and advances, he said.
Giving an update to financial analysts today (Thursday), NMBZ chief executive Ben Washaya pointed out that the positive results had been achieved despite a slowdown in business in the last quarter of the year, as businesses adjusted to the new policy measures outlined in the Transitional Stabilisation Programme presented soon after last year’s national elections.
The healthy profit was achieved despite operating expenses, which stood at US$34 720 428, having increased by 26 percent from the previous year’s US$27 578 347. The increase in expenditure was due to increased transaction processing and operational costs arising from the bank’s digital thrust and general inflationary pressures largely driven by foreign currency shortages.
The bank’s liquidity ratio closed the period at 41,62 percent, which is above the statutory requirement of 30 percent
In 2018, the Bank opened two service centres in Bindura and Chitungwiza and undertook the construction of a new Head Office along Borrowdale Road, said Mr Washaya.
Presenting the results to financial analysts, NMBZ chief finance officer Benson Ndachena said the bank continued its drive to reduce non-performing loans (NPLs). The NPL ratio stood at 7,43 percent at the end of the year.
He said assets increased by 25 percent from US$422 564 352 as at the end of 2017 to US$527 067 596 at the end of 2018, mainly due to a 27 percent increase in investment securities, a 21 percent increase in loans, advances and other assets, a 10 percent increase in investment properties, an increase of 26 percent in cash and cash equivalents and a 143 percent increase in property and equipment.
Investment securities (Treasury Bills and Bonds) increased by 27 percent from US$92 245 425 as at 31 December 2017 to US$117 249 434 as at 31 December 2018 mainly due to some purchases from both the primary and secondary bond markets.
Basic earnings per share were 5,43 US cents per share. In 2017 they were 2,58 cents. The dividend per share was 0,96 US cents. The NMBZ board has proposed a final scrip dividend alternative to the cash dividend. Total shareholders’ funds and liabilities amounted to US$79 962 313.