Listed banking stock, NMB Zimbabwe delivered a strong operational and financial performance in 2022, driven by the implementation of various growth strategies.
Benedict Chikwanha, the board chair of NMB in a statement accompanying results said “Operating income increased from $23.9 billion to $41.9 billion for the year ended 31 December 2022, largely driven by continued growth in transaction volumes and values during the period under review. Comprehensive income for the period amounted to $12.5 billion (Dec 2021 $7.7 billion).”
As a result, the bank achieved profit after tax amounting to $12 billion compared to $6.4 billion for the previous year representing a growth of 69%.
According to Chikwanha, inflation pressures as well as the deteriorating exchange rate continued to pause a challenge on operating costs. This led to an increase in costs by 57% from $12.1 billion for the year ended 31 December 2021 to $19 billion for the current period. The Group continues to focus on revamping its process to increase efficiencies with the use of robotic process automation being key among other various initiatives.
NMB’s investment property portfolio was valued at $22.6 billion as at 31 December 2022 while property and equipment stood at $17.6 billion. The revaluation gains largely reflect the changes in the macro-economic environment and a deliberate strategy by the bank to preserve value for shareholders.
Loans and advances stood at $46.3 billion as at 31 December 2022. The banking subsidiary maintained a high-quality loan book, closing the year with an NPL ratio of 1.09%
The Bank maintained a sound liquidity position with a liquidity ratio of 50% and this was above the statutory minimum of 30%.
In a statement accompanying results, NMB chief executive, Gerald Gore said, “In pursuit of our exponential growth aspiration, the Group’s diversification thrust gathered momentum.”
This comes as the financial group now has a new subsidiary to add to the bank, namely the Property Development Company.
According to Gore, the banking division also diversified its operations as we set up a microfinance division with the aim of providing more focused services to individuals and micro businesses. “A Technology Services division was also set up and is in various discussions with a number of banks in the region where we will become their technology partner to drive their digital transformation agendas,” he said.
NMB thinks that the group will be able to generate foreign currency from this as well. The bank has gained access to new markets thanks to the new subsidiary and divisions, which also have a clear strategy for how to become dominant leaders in their respective industries.
Gore added that, “Capital allocation was key and the new businesses were capitalised organically. All the Group’s subsidiaries are adequately capitalised and capacitated to pursue their strategic goals.”
The chief executive said that among the topics they gave proper attention to were developing their core banking business and geographic representation. As they added more billers, offered payment options like airtime and data purchasing, and launched an agency banking system, the banking industry continued to use technology to deliver services more effectively.
The innovation on agency banking enabled NMB to seamlessly on-board the Zimpost agency partnership and the banking subsidiary also increased its digital workforce as it deployed more robots largely in the accounts reconciliation space via their Robotic Process Automation section.
Gore added that, “The banking subsidiary is now focused on ensuring a comprehensive package of products is offered through the agency network for the convenience of customers. The main drivers for setting up these particular subsidiaries are income diversification, maximum utilisation of skills and capacity within the Group, efficient use of capital and value preservation.”
The bank hopes that all the subsidiaries will leverage the group’s digital capabilities and superior customer services – Harare