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SOUTH African headquartered Nedbank is gaining ground in Zimbabwe where its future is now certain following the approval of its indigenisation compliance plan.Nedbank is a majority shareholder in MBCA Bank and chairman Willard Zireva said last week that it would rely on liquidity support from its South African parent company.

Zireva said MBCA had availed a $75 million (R1.17 billion) credit facility for on-lending to corporates in Zimbabwe that were struggling to get funding elsewhere.

“In addition to the lending on the MBCA balance sheet, the bank continues to benefit from the major shareholder’s technical support as well as a $75m line of credit to provide commodity finance to Zimbabwe companies,” Zireva said.

While other foreign companies in Zimbabwe battle to comply with the indigenisation policy Zimbabwe is pushing through, MBCA said it was “in the process of implementing the approved indigenisation plan” although it did not provide further details.

The indigenisation plan requires foreign companies give away a 51 percent majority stake in local firms into the hands of black Zimbabwean groups.

Other foreign banks in Zimbabwe include Standard Chartered, Standard Bank owned Stanbic and Ecobank.

Despite the strong financials the outlook is clouded by increased power shortages, reduced agriculture earnings due to erratic weather conditions, limited irrigation facilities and low mining earnings due to weak commodity prices on global markets.

“This is exacerbated by increased competition from imports given local infrastructure constraints and unfavourable exchange rate dynamics,” Zireva added.

The Nedbank Zimbabwe unit closed last year with a balance sheet that had grown $243.884m from the 2014 value of $188.936m.

This had been attributed to “growth in the loan book and Treasury Bills (TBs), which grew by 11 percent and 32 percent” respectively.

Nedbank Group Ltd is a bank holding company and one of the four largest banking groups in South Africa measured by assets, with a strong deposit franchise and over seven million customers. The bank is 54 percent owned by the parent company, Old Mutual plc. — Wires