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NMB records surprise loss

Ngoni Chanakira

HIGH-FLYING banking group NMB Holdings has recorded a surprise inflation-adjusted attributable loss of $28,5 million over the adjusted result for the same period last year.

The group says runaway inflation, foreign currency shortages and a deteriorating balance of payments position will continue to affect the country’s economy.

Inflation-adjusted loss before taxation from continuing operations increased from a profit of $94,269 million to a loss of $12,739 million during the period under review.

Loss before taxation from discontinuing operations increased from a profit of $886 million to a loss of $3,021 million.

NMB Holdings chairman Paddy Zhanda said Zimbabwe’s balance of payments position is precarious with domestic debt currently standing at $600 billion and was dominated by Treasury Bills, which account for 97,5%, while government bonds account for the balance of 2,5%.

Government however intends to further restructure the domestic debt this year by issuing more long-dated instruments. The budget deficit is expected to reach $1,83 trillion this year and domestic debt is set to end the year at about $2,4 trillion.

Zhanda on Wednesday said a “regime change was needed” as far as economic prosperity was concerned.

He however could not confirm whether regime change meant a change of government.

“We do not comment on such issues,” he told businessdigest in an interview. “We comment on the state of affairs in the economy.”

Zhanda said he was still proud to be at the helm of NMB Holdings despite the bad publicity that has seen the blue-chip company tumbling from the top of the Zimbabwe Stock Exchange (ZSE) pedestal.

The first indigenous-owned bank in the country, NMB Holdings is capitalised to the tune of $40 billion on the stock exchange. It is dually listed on the London and Zimbabwe stock exchanges.

The bank has been engaged in running battles with the law and last year disposed of its interest in Continental Securities Trading (Pvt).

The subsidiary contributed negatively to group attributable profit.

Last year NMB’s foreign currency trading licence was withdrawn by the central bank after it was accused of having abused the facility.

This year four of its directors – managing director Julius Makoni, deputy managing director James Mushore, finance director Otto Chekeche and executive director Norman Zimuto – have fled Zimbabwe after being put on the wanted list by the police. The four are accused of having externalised foreign currency, a charge they deny.

“We did trade on the parallel market,” Zhanda told stockbrokers. “This is not surprising because everyone was doing it. In fact the parallel market had become the norm and we simply continued with the business conditions of the time. I do not regret having done what we did because it was simple business practice. I can safely say the bank is in a sound and solid position.”

Zhanda said Zimbabwe’s balance of payments position remained precarious last year largely as a result of poor export performance coupled with the absence of external capital inflows.

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