NMBZ posts US$4,8m profit

NMBZ Holdings reported a profit before tax of US$4,8 million for the half-year to June 30.

Kudzai Kuwaza

Total comprehensive income rose to US$3,5 million, an increase of 35% compared to the same period last year, when comprehensive income stood at US$2,6 million. The group achieved earnings of 93 US cents per share compared to 69 US cents in the same period last year.

Speaking at the bank’s analyst briefing on Wednesday this week, NMBZ CE Benefit Washaya said this had been achieved despite a challenging economic environment characterised by nostro funding challenges, cash shortages, company closures and job losses.

Shareholders’ funds stood at US$59,2 million while the capital adequacy ratio was 23,88% against the Reserve Bank of Zimbabwe (RBZ) requirement of 12% and liquidity ratio of 35,7% versus RBZ’s minimum requirement of 30%.

He said the capping of interest rates at 12% per annum for the productive sector had an adverse impact on revenue but added that this development was necessary in order to promote exports by allowing the productive sector to enjoy competitive interest rates.

Total deposits at June 30, 2017, amounted to US$273 million compared to US$249 million on June 30, 2016, and US$260 million as at December 31, 2016.

Washaya revealed that a transaction had been concluded last week whereby shareholders Norfund and FMO, having teamed up with Rabobank to pool their investments in Sub-Saharan African financial service providers, had handed over their shareholding in NMBZ to their joint investment company Arise.

The financial institution decided not to pay a dividend, citing the need to retain cash in the business in order to fund growth initiatives as well as strengthen the statutory capital requirements for the banking subsidiary.

Washaya said NMB Bank had started drawing down on a US$15 million line of credit from two European development finance institutions, adding that this line is only available to exporting customers.

Valuation

As of Wednesday, NMB had a market cap of US$19 million and book value of US$59 million, representing a discount of 68,8% and a price-to-earnings ratio of 5,4.
As at July 31, the counter had a P/E of 3,07.