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Bianca Mlilo, Business Reporter
NMBZ Holdings, the parent company of NMB Bank is in the process of drawing down a $20 million line of credit and has applied for an additional $15 million facility from offshore.

The group’s public relations consultancy indicated that NMBZ chairman, Mr Benedict Chikwanha, in a statement accompanying the firm’s unaudited accounts for the half-year ended June 30, 2016 said:

“The banking subsidiary continued to make inroads into the broader market segments, thereby laying a foundation for a strategic shift towards small to medium-sized enterprises.

“He said the group continued to source more international lines of credit and was in the process of drawing down a $20 million line of credit and finalising the legal documentation for an approved further $15 million facility.”

The consultancy said Mr Chikwanha pointed out that the decision by two of NMBZ’s shareholders, FMO of the Netherlands and Norfund of Norway, to join forces with Rabobank of the Netherlands to pool investments in financial institutions across Africa through a new investment vehicle, Arise, would enable NMBZ to benefit from a wide network of other African banks that are part of the new partnership.

It is believed this would assist NMBZ in its quest for the much-needed lines of credit to serve small and medium enterprises, the rural sector and clients who previously did not have access to financial services.

Arise will have a presence in 20 African countries. It would allocate capital, Mr Chikwanha said, to support current investee companies, as well as new minority investments in the market.

Mr Chikwanha said the bank’s Tier One capital was $44,3 million as at June 30, 2016.

“We’ll continue to put strategies in place to work towards meeting the required minimum regulatory capital of $100 million for a Tier One bank by 31 December 2020, subject to improvements in the operating environment as forecast in our capitalisation plan submitted to and approved by the central bank,” he was quoted as saying.

During the period under review, the group posted a $3,6 million profit before tax resulting in an attributable profit of $2, 6 million.

The attributable profit was, however, 17 percent less than that for the same period last year, which was $3,1 million,  a reflection of the difficult operating environment.

Total income for the period decreased by nine percent to $26 million compared to $28, 8 million in the first six months of 2015.

“The drop in income was partially cushioned by a drop in operating expenses at $13,5 million, down by four percent compared to $14 million  the previous year, as a result of cost rationalisation and containment measures.

“Interest income was almost flat, at $17,5 million compared to the $17,6 million in 2015. A bigger drop was recorded on the fee and commission income, down from $10,6 million in 2015 to $7,6 million,” said the consultancy.

It said the drop was a combination of the controls on bank charges and a drop in transactional volumes due to the cash and nostro challenges besieging the banking sector.

The bank has also been on a drive to migrate customers to the less expensive electronic delivery channels.

Net foreign exchange gains, which in the first six months of 2015 had amounted to $609 218, came to $353 209.

Shareholder funds increased by five percent from $50,5 million as at December 31, 2015 to $53,2 million, as a result of the attributable profit recorded for the half-year.

The bank’s capital adequacy ratio at 20,8 percent was substantially higher than the Reserve Bank of Zimbabwe’s  minimum requirement of 12 percent, while its liquidity ratio, at 32,5 percent, was again  above the Reserve Bank’s minimum requirement of 30 percent.

@BiancaMlilo