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NMB positive about mining, construction

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NMB says it sees enormous potential in construction and mining as it actively seeks more lines of credit after drawdowns for the recently secured €12.5 million European Investment Bank facility commenced.

BERNARD MPOFU

Access to long-term funding and policy inconsistency have been cited as some of the major impediments affecting local business from retooling and competing with regional peers.

In June, the EIB and the local bank announced the seven-year facility to business investment across the country.

Gerald Gore, NMB chief executive, then told delegates attending the event that the market had been starved of long-term fairly priced offshore credit facilities.

In its half-year results for the period ending 30 June 2022, the banking group said its main subsidiary, NMB Bank Limited, remains well capitalised with a tier-1 capital adequacy ratio of 22.28%. Risk weighted assets stood at ZW$58.26 billion, up 10.15% from December 2021 levels.

“Drawdowns have started on the recently signed EIB EUR12.5 million line of credit. Armed with a strong deal pipeline, the group will continue to engage with providers of funding to raise more lines of the credit,” the group says.

“Despite the economic challenges currently bedeviling the economy, the mining and construction industry continues to show signs of resilience and recovery. Mining and construction are projected to grow by 9.5% and 10.5% respectively on account of higher commodity prices and government infrastructure projects.”

The group achieved operating income of ZW$10.4 billion, up from ZW$5.7 billion achieved in the comparative period.

“This was driven by a significant increase in interest income and continued growth in fees and commission income,” a statement accompanying the financials reads.

Total assets increased by 8.01% to close the period at ZW$69.41 billion largely responding to inflation and movements in the exchange rate. Loans and advances closed the period at ZW$22.83 billion, up 4.34% from December 2021 levels.

The group says it continues to take a measured approach to risk, as evidenced by the strong asset quality with an non-performing loan ratio of 1.22% compared to 1.39% as at 31 December 2021. The net charge for expected credit losses was ZW$259 million for the period under review.

Deposits and other liabilities grew by 4.47% from December 2021 levels. This, the bank says, was largely reflecting the impact of the exchange rate depreciation.

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