By Kudzai Kuwaza
Nedbank Zimbabwe said yesterday it was projecting growth this year, as the government rolls out the Covid-19 vaccination programme, which will have a strong bearing on the bank’s performance.
Managing director, Sibongile Moyo said this as the bank delivered a strong financial performance during the half year ended June 30, 2021, with an inflation adjusted total comprehensive income of ZW$325 million (about US$3,8 million).
Profit after tax was ZW$227,7 million (US$2,67 million) during the half year period.
The bank’s deposits stood at ZW$13,1 billion (US$154,1 million), during the review period, which was a 4,7% decrease in inflation terms.
Total assets increased by 17% in inflation adjusted terms to ZW$20 billion (US$235,2 million), from ZW$17,1 billion (US$201 million) during the year ended December 31, 2020.
“We look forward to a rebound in GDP (gross domestic product) growth in 2021 as the nation rolls out an effective Covid-19 vaccination programme that will have a positive impact on our clients and their businesses,” Moyo said in a statement accompanying the financial statements.
“The bank will continue to adapt to the changing environment as we strive to deliver leading client experiences to the market and to support our clients.
“Management continues to focus on optimising the statement of financial position by deploying deposits in quality earning assets through hedging strategies to preserve capital,” she added.
The Nedbank MD added that performance was underpinned by a substantial growth in loans during the period, which came as deposits, in inflation adjusted terms, remained flat, even after Covid-19 induced lockdowns affected the economy.
But Nedbank’s performance on deposits was helped by a scaling up of client engagement initiatives during the review period, including partnerships and sponsorships, which enhanced brand visibility.
Moyo said operating income for the period was ZW$1,662 billion (US$19,5 million), which was spurred by a 108% increase in non-funded income from digital channels, including of sale machines.
In addition, fees, commissions, trading and dealing income increased by 97%.
Moyo said net interest income surged 119% in inflation adjusted terms over the comparative period on the back of increased loans and advances as well as the upward review of the minimum lending rate in April this year. She said net interest income grew by 132%, spurred by a 37% growth in loans and advances in inflation adjusted terms, as well as an increase in yields on investment securities at armotised cost.
The strong performance mirrored the growth at pan-African financial services powerhouse Nedbank Group, which also delivered a strong financial performance during the period. Nedbank Zimbabwe is a unit of the Nedbank Group, which said headline earnings during the period increased by 148% to R5,3 billion (US$355,5 million).
The Johannesburg Securities Exchange quoted bank, with a market capitalisation of R87 billion (US$583,6 million) as at June 30, 2021 has a footprint across southern African countries, including Zimbabwe, where it operates one of the fastest growing banks. Financial statements for the period showed the Zimbabwean operation in good steady despite Covid-19 induced shocks, which grounded the economy during the review period.
The group said headline earnings were boosted by significantly lower impairments, a higher net interest margin and disciplined expense management.