NEDBANK Zimbabwe says it is hopeful to receive a positive response from the central bank following an assessment of the financial institution’s ability to meet new capital requirements in the face of the Covid-19 pandemic.
The Reserve Bank of Zimbabwe last year hiked five-fold the minimum capital requirements for banks and other financial institutions.
In line with the regulation, the central bank set a minimum capital requirement which are the equivalent of US$30 million for large commercial and foreign banks (first tier), US$20 million for commercial banks, merchant banks, building societies, development banks, finance and discount houses (second tier), US$5 million for deposit-taking microfinance banks (third tier) and credit-only microfinance institutions US$25 000, by 31 December 2020.
In August, the apex bank later extended by a year the deadline for local financial institutions to meet the new minimum capital requirement, having taken into consideration the impact Covid-19 has had on the financial services sector.
Nedbank chairperson Shepherd Shonhiwa, in a statement of results for the financial year ended December 31 2020, said the directors had done an assessment of the issue.
“The directors assessed the bank’s ability to meet the revised minimum capital requirements in the face of the impact of Covid-19. They are hopeful that the bank will get a positive response from the Reserve Bank of Zimbabwe on its capital plan which is supported by the major shareholder,” he said.
Going forward, Shonhiwa said, the bank will continue to focus on its clients by providing market-leading client experiences.
Nedbank delivered a strong financial performance with substantial growth in operating income and profitability and displaying resilience in a challenging operating environment in 2020.
Operating income grew to ZW$3.4 billion outpacing in inflation terms ZW$2.9 billion in prior year while it registered a ZW$1.1 billion historical profit total comprehensive income in 2020 against ZW$198 million in 2019.
The 2019 losses were reversed, to achieve inflation-adjusted total comprehensive income of ZW$159 million from a ZW$761 million while also attaining a ZW$14.2 billion total balance sheet size from ZW$12 billion, reflecting 18% growth in inflation-adjusted terms.
Deposit growth for the bank in historical terms stood at ZW$11.3 billion from ZW$2 billion in 2019, achieving 23% deposit growth in inflation-adjusted terms.
The bank’s operating performance was underpinned by non-interest income and cost optimisation premised on customer base and accounts growth with remote onboarding via digital, digital platform transactions volume growth as well as point-of-sale value growth to clinch second-place market share of all Zimswitch transactions.