Golden Sibanda : Senior Business Reporter
NMBZ Limited says it will prioritise lending to export earning businesses, as this would also boost nostro account funding while less would be allocated to importers due to the control measures taken by both the Reserve Bank of Zimbabwe and Government. Chief executive Benefit Washaya told analysts on Wednesday that less funding would be extended to importers following measures taken by Government to restrict imports in a bid to give local manufacturers time to retool and acquire new technologies.Mr Washaya said due to the risks experienced during the last six months that are related to challenges facing importing clients, the bank has had to re-organise its loan book to support export oriented entities.
“We are supporting the sectors that will generate exports because those are the sectors that will be able to access nostro funding,” he said. This follows prioritisation allocation of foreign currency for corporates and individuals wishing to make external payments. Prioritisation of imports was introduced by the central bank to address the market-wide nostro funding limitations,” NMBZ said.
NMBZ, recorded a profit before tax of $3,5 million for the half-year ended June 30, 2016.
The banking group’s attributable profit was, however, 17 percent lower than last year at $2,6 million from $3,1 million, a reflection of the difficult operating economic environment.
Total income for the period decreased by nine percent to $26,09 million compared to $28,80 million in the first six months of 2015.
The drop in income was partially cushioned by a drop in operating expenses at $13,5 million, down by four percent compared to $14 million the previous year, as a result of cost rationalisation and containment measures the bank has undertaken. Interest income was almost flat, at $17,45 million compared to the $17,5 million in 2015.
A bigger drop was recorded on the fee and commission income, down from $10,5 million 243 in 2015 to $7,5 million.
The drop was a combination of the controls introduced by the central bank on bank charges and a drop in transactional volumes due to the cash and nostro challenges facing the banking sector. NMBZ has been on a drive to migrate customers to the less expensive electronic delivery channels. Net foreign exchange gains, which amounted to $609 218 in the 2015 half-year, came to $353 209.
Shareholders’ funds increased by five percent from $50,5 million at December 31 2015 to $53,1 million as a result of the attributable profit recorded for the half-year.
The bank’s capital adequacy ratio at 20,8 percent was substantially higher than the RBZ’s minimum requirement of 12 percent. NMBZ’s liquidity ratio, at 32,5 percent, was again above the Reserve Bank’s minimum requirement of 30 percent. The bank’s non-performing loans ratio came down from 14,9 percent as at June 30 2015 to 11,1 percent as a result of aggressive collection efforts and loan disposals to RBZ’s Zamco.
The has bank recently gone on a drive to reduce exposures to clients in vulnerable sectors while selectively issuing loans to those in strong and growth sectors, hence the decline in total loans.
Further, the bank transferred bad loans amounting to $11,6 million to the Zimbabwe Asset Management Corporation.