HARARE – Dual-listed financial services group, NMB Zimbabwe (NMBZ), has sold off just over $12,7 million of bad loans, almost completing the disposal of its toxic portfolio.
The group’s chief executive, Benefit Washaya, last week said his organisation was cleaning its balance sheet to make it attractive to international financiers.
This comes as the Zimbabwe Stock Exchange-listed financial services group has recorded a decline in loan and advances to $205,9 million last year from $243,2 million in 2015 on the back of harsh economic conditions which resulted in constrained lending. Washaya said NMBZ was targeting a non-performing ratio of five percent by year end from the current 10,7 percent.
In the half year to June 2016, the group’s NPL ratio came down from 14,9 percent as at June 30, 2015 to 11,1 percent driven by aggressive collection efforts and bad loans valued at $11,6 million were shelved to Zamco.
In the full year to December last year, NMBZ profit after tax reduced 7,8 percent to $5 million on the back of “extreme pressure” from limits placed on interest rate charges and fees.
“The interest caps, controlled transactional and plastic money fees had an adverse effect on our performance which we had to partly counter through increased volumes,” Washaya said.
However, the bank’s net interest income was up 10,3 percent from $20,6 million to $22,8 million, while fees and commissions income slumped 27,7 percent to $15,2 million.
At $260,6 million, total deposits were six percent down from $277,2 million recorded prior comparable period, on the back of funding opportunities. The bank’s liquidity ratio was up to 40,06 percent from 30,04 percent, while operating expenses dropped three percent from $26,9 million to $26,2 million.
Impairment losses on loans and advances declined from $9,5 million in the previous year to $8,1 million on the back of strict credit underwriting. The group’s total assets declined by four percent from $333,8 million in the previous year to $320,9 million on the back of a 15 percent fall in loan and advances. At $50,2 million, the bank’s capitalisation remained above the minimum central bank capital requirement of $25 million. Washaya noted that the London Stock Exchange-listed group’s focus going forward was going to be on cost optimisation, reduction and rationalisation.