The Board of Directors of NMBZ Holdings Limited announces the release of the 2014 annual report. Below are some excerpts from the Chairman’s statement:
The Group recorded an attributable profit of US$1 667 247 which was an improvement from an attributable loss of US$3 321 823 recorded in 2013. The improvement in the operating results was underpinned by the current efforts being made by the Group to contain non-performing loans, implementation of a new credit system and the repositioning of the Bank in the financial services sector.
Compliance with International Financial Reporting Standards, the Companies Act and the Banking Act
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). The financial statements have also been prepared in compliance with the provisions of the Companies Act (Chapter 24:03) and the Banking Act (Chapter 24:20).
Assessment of the economic environment
The economic slowdown which started in the last two quarters of 2013 persisted into 2014 and the economy has continued to be characterised by company closures, deflation, lack of liquidity and increasing default risk. The slowdown in the economy has further worsened the default risk within the Banking sector with non- performing loans having increased from an industry average of 15.92% as at 31 December 2013 to 20% as at 30 September 2014 before coming down to 16% as at 31 December 2014 largely due to bank closures.
Commentary on operating results
The profit before taxation was US$2 425 522 during the period under review and this gave rise to an attributable profit of US$1 667 247. Total income for the period decreased by 4% from a prior year of US$50 135 302 to US$48 078 454 which is comprised of interest income of US$31 072 461 (2013 -US$33 181 704), fee and commission income of US$15 121 536 (2013 – US$14 673 834), net foreign exchange gains of US$1 822 432 (2013 – US$1 502 044) and non – interest income of US$62 025 (2013-US$777 720)…
Statement of financial position
The Group’s total assets grew by 10% from US$259 483 112 as at 31 December 2013 to US$286 049 034 as at 31 December 2014. The assets comprised mainly of loans, advances and other assets (US$203 363 052) (2013 – US$181 316 271), investment securities held to maturity (US$3 874 525) (2013 – US$4 685 471), investment in debentures (US$4 614 047) (2013 – US$3 984 723), cash and short term funds (US$54 750 561) (2013 – US$48 871 983), investment properties (US$4 453 300) (2013- US $4 385 300), non-current assets held for sale (US$2 267 300) (2013 – US$2 303 300) and property and equipment (US$6 345 267) (US$2013 – US$7 372 943). Gross loans and advances increased by 12% from US$194 777 798 as at 31 December 2013 to US$217 463 319 as at 31 December 2014 mainly due to increase in loans advanced to civil servants…
In view of the need to retain cash in the business for expansion purposes and to strengthen the statutory capital requirements for the banking subsidiary, the Board has proposed not to declare a dividend.
CORPORATE SOCIAL INVESTMENTS
The Group is committed to playing an active role in the communities it serves. Our social investments during the year were channelled into special education needs, the disadvantaged, vulnerable groups, protection of the environment, wild life conservation, the arts and various sporting disciplines…
The Group introduced mortgage lending in May 2014 and this is in keeping with the aim of providing our clients with a full range of financial services. In response to technological changes and the evolving customer needs, the Group is continuously reviewing the electronic delivery channels inorder to harness opportunities presented for the convenience of our valued customers.
OUTLOOK AND STRATEGY
The Group has broadened the market catchment segment for the banking subsidiary by tapping into the mass market. The new focus will allow the Group to build a sustainable operation without compromising the service excellence which is synonymous with the Group.
A new branch will be opened in Kwekwe in the second quarter of 2015 and a further two branches will be opened in the third quarter of 2015.
Mr. J. A. Mushore resigned as a director of NMBZ Holdings Limited and NMB Bank Limited due to ill health with effect from 31 October 2014. Dr. J. T. Makoni resigned as a director of NMBZ Holdings Limited with effect from 31 December 2014…
I would like to express my sincere gratitude and appreciation to our valued clients, shareholders and the regulatory authorities for their continued support during the period under review. My appreciation also goes to my fellow Board members, management and staff for their continued dedication and commitment which has underpinned the achievement of these results in the face of an increasingly difficult operating environment.
T. N. MUNDAWARARA
2014 Annual report