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Shamiso Dzingire, Business Reporter
ONE of the country’s commercial banks, Nedbank Zimbabwe Limited, recorded a 61 percent increase in profit after tax to $4,37 million during the first half of the year compared to the corresponding period in 2017.

The bank’s managing director Dr Charity Jinya revealed this in a statement accompanying unaudited financial results for the half year ended June 30, 2018.

She attributed her bank’s improved performance to growth in total non-interest revenue which increased from $8,65 million to $11,48 million on a year-on-year basis.

“Strategic initiatives resulted in growth of 26 percent of the bank’s account base and increase of 271 percent in point of sales machines.

“These initiatives led to a rise in electronic banking platform transactions which contributed to this strong performance,” said Dr Jinya.

She added: “The performance of net interest income also contributed to the growth of profit after tax which increased by 21,9 percent from the prior year.”

The bank’s total assets during the period under review also increased by 6,1 percent to $391,51 million from $369,07 million recorded in December last year largely because of an increase in net loans and advances to customers which grew by 14,6 percent and investment in the Reserve Bank of Zimbabwe savings bonds of $70 million.

The increase in the loan book was mainly attributed to increased utilisation of existing facilities.

During the period under review, total deposits from customers increased by 3,27 percent to $307,16 million up from $297,44 million recorded in December last year.

Dr Jinya said the growth was in line with the financial institution’s strategic deposit mobilisation initiatives on account growth.

The bank’s non-performing loans ratio for the period under review also decreased from 7,69 percent recorded in December last year to 6,51 percent due to robust credit processes.

The decrease demonstrates continued focus on improving the credit quality of Nedbank Zimbabwe’s lending book.

However, Dr Jinya noted that country risk and credit counterparty risk were still perceived high, making it difficult for the banking sector to secure credit on favourable terms.

She also said total expenses excluding impairment charges at $14,59 million for the six months of the year were 16 percent up from $12,60 million recorded during the same period last year.

Dr Jinya said the major lines that contributed to this increase were employee costs and administrative expenses which went up by 14 percent and 16 percent respectively.

“The growth in these expenses was mainly from projects related costs (implementation of the core banking system and the rebranding exercise), employee empowerment and increase in the bank’s distribution channels,” she said.

During the period under review, the bank also awarded its employees the final tranche of shares through the Employee Share Ownership Scheme in line with the approved Indigenisation Plan.

Consequently, the employee trust now owns 7,5 percent of the bank.

In March, Nedbank Zimbabwe Limited rebranded from MBCA Bank Limited in an effort to align itself with the parent company, the Nedbank Group across the Sub-Sahara Africa region.

@ShamisoDzingire