NMB loan book up 39% thanks to stable rates
Senior Business Journalist
NMB Holdings says the stability of interest rates has enabled its banking unit to channel more credit facilities to productive sectors of the economy.
The Reserve Bank of Zimbabwe (RBZ) raised its overnight interest rate from 40% to 60% during a monetary policy meeting held on October 28, 2021 which the central bank said would result in high rates. real positive interest needed to stimulate savings in the money market.
The central bank also increased the rate of the medium-term bank hosting rate, a fund designed to provide low-cost financing to industry from 30 to 40 percent.
“Interest rates remained fairly stable in the third quarter, allowing the banking unit to continue channeling credit facilities to the wider economy with particular emphasis on productive sectors,” said Violet Mutandwa. , secretary of the company, in a commercial press release for the period ended September 30, 2021.
She said that during the period under review, the bank’s loan portfolio grew 39% to $ 7.2 billion while customer deposits increased 38% to $ 9.1 billion. .
As of September 30, 2021, the year-over-year inflation rate was 52%. Mutandwa said the group hopes the monetary authorities will continue their efforts to maintain the stability of the prevailing exchange rate, which largely underpins the country’s economic stability and provides the necessary impetus for economic growth.
In terms of financial performance, the Group recorded 66% growth in operating income, from $ 2.3 billion for the six-month period ended June 30, 2021 to $ 3.9 billion for the nine-month period. September 30, 2021 in inflation-adjusted terms.
“This is due to the growth in unfunded income driven by increased transaction volumes on the Bank’s digital platforms,” ââshe said.
Mutandwa reported that the Bank’s inflation-adjusted regulatory capital as of September 30, 2021 was $ 5.02 billion and was above the minimum regulatory capital requirement of $ 25 million.
She said this translates to a capital adequacy ratio (CAR) of 27.14% as of September 30, 2021, which is significantly higher than the prescribed minimum regulatory ratio of 12%.
“The bank is working to ensure it remains in compliance with the minimum regulatory capital level required for Tier 1 banks of an equivalent of US $ 30 million by the deadline of December 31, 2021” , she said.
According to Mutandwa, the banking subsidiary continued its digitization drive in the last quarter, focusing largely on the customer journey and ensuring that its processes and platforms make access to services as convenient and transparent as possible.
She said that during the period under review, three improvements were made to the group’s channels, namely that Econet customers can now access NMBConnect, the digital branch of NMB Bank, without data charges.
âThis ensures that access to data or airtime will not be an obstacle to safe and convenient banking operations. Similar agreements with other telecommunications partners are underway, âshe said.
Other developments are the new Visa card with a new look and a robust system from which these cards are managed, to ensure the convenience of the customers. In a single card, customers can deposit four currencies namely USD, ZAR, GBP and Euro, allowing payment of bonds in the preferred currency.
âThe bank has also implemented a security enhancement of the Connect app to improve the security of the platform,â Mutandwa said.
She pointed out that recent strong commitments and pledges from the government, RBZ and the business community to maintain strong macroeconomic fundamentals that support exchange rate stability are encouraging and will help manage costs.
“To this end, the banking sector has experienced a tightening of the money supply, an upward revision of the key bank rate to curb speculative borrowing, a refinement and rationalization of the foreign exchange auction system so that it continues. to play its role of price discovery among other commitments, âMutandwa said.
She added that the sector is optimistic about a good agricultural season 2021/2022 based on the forecast of good rains and the outlook for the mining industry based on the positive outlook for commodity prices, improving capacity utilization and the expected increase in production which will have a positive impact on the country’s economic growth prospects.