Staff Writer

Nedbank Zimbabwe said first half loans and advances grew by ZWL$623.96 million from ZWL$1.68 billion as at 31 December 2020 as the bank continues to support the productive sectors of the economy.

“Loans and advances grew by 37% as the Bank sought to extend credit to support industry,” said the company in its half year results.

Deposits at Nedbank Zimbabwe declined 4.7% to ZWL$13.1 billion in inflation adjusted terms. As a result, loans to deposit ratio rose to 17% as in H1 2021 from 12% as 31% December 31, 2020.

“Management continues to focus on optimizing the statement of financial position by deploying deposits in quality earning assets and through hedging strategies to preserve capital.”

Banks have responded to calls of supporting the local economy despite the challenging operating environment which is characterised chiefly by policy inconsistencies.

Operating income stood at ZWL$1.662 billion backed by a 108% increase in non-funded income from digital channels including point of sale acquiring and 97% increase in fees, commissions, trading and dealing income.

Net interest income grew by 119% in inflation adjusted terms over the comparative period on the back of increased loans and advances as well as an upward review of Minimum Lending Rate by the Bank in April 2021.

Total revenue was up 17% due to a 92% reduction in unrealized foreign exchange gains which contributed 64% of total revenue in the prior year. Revenue from customer transactions grew by 101% compensating the reduction in unrealized foreign exchange gains due to relative stability in the ZWL interbank exchange rate over the comparative period.

Inflation adjusted profit declined by 36% to ZWL$227.66 million from ZWL$357.64 million in H1 2020. Analysts attributed the decline in profitability to increased operating expenses as the Bank went on an aggressive digital drive so as to adapt to the new normal.

Total expenses fell 4% to ZWL$1.328 billion owing to the decline in the monetary loss charge as the year-on-year inflation rate slowed down to close at 101% as at the end of June.

Operating expenses rose 79% to ZWL$438.75 million from ZWL$244.74 million in H1 2020.

“Other operating expenses have however increased significantly driven by staff remuneration, technology, premises costs and Covid-19 induced expenditure to ensure a safe working environment,” said the Bank.

Inflation adjusted cost to income ratio closed the period at 80% compared to 69% in H1 2020.

The Bank’s statement of financial position grew by 17% in Inflation adjusted terms with total assets closing at ZWL 20.01 billion at 30 June 2021 compared to the 31 December 2020 position of ZWL17.14 billion – Harare



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