Bank warns on bills scrapping

NMBZ Holdings chief executive officer James Mushore has warned that the cancellation of domestic consumers’ debts owed to local authorities and plans to write off more utility bills may worsen the liquidity crisis.

Bernard Mpofu,Acting Business Editor

Addressing an analyst briefing in the capital yesterday, Mushore said while business accepts the outcome of the July 31 elections, the post election government faces a herculean task of sourcing long-term capital to stimulate economic growth.

NMBZ Holdings’ after tax profit was up 0,04% to $2,6 million for the six months to June.

“I think the stagnation in the economy and the liquidity problems are going to be exacerbated now with the cuts or cancellation in rates and bills. The suggestion of cancellation of other utility bills is certainly going to impact on liquidity going forward and obviously this affects everybody,” Mushore said.

He said the bank’s non-performing loans for the six months to June had increased due to an underperforming economy.

The group’s loans and advances were up 10% to $210,6 million during the period under review. Independent estimates suggest that Zimbabwe lost nearly $1 billion to offshore markets due to uncertainty that gripped the country in the run up to elections.

Official figures show that Zimbabwe’s economic growth rate is this year expected to slow down due to underperformance of mining, manufacturing and agriculture.

Outgoing Finance minister Tendai Biti last month warned that seven commercial banks exposed to local authorities may fold following Local Government minister Ignatius Chombo’s directive for municipalities across the country to write off public debt.

Chombo ordered local authorities to scrap all outstanding rates as at June 30, 2013.

NMB group chairperson Tendayi Mundawarara, however, said the bank would remain aggressive in sourcing lines of credit despite the biting liquidity constraints.

“We eagerly wait to see whether the economic environment will now become more certain and predictable post the recent harmonised elections. Whatever the case, the group will continue to scout for more international lines of credit. The group will also explore growth opportunities in other markets,” Mundawarara said in a statement accompanying the financial results.

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  1. Words of wisdom from a crook recently returned from self imposed exile following revelations of some of the shadiest banking practices ever seen …even in a cleptocracy. A budding minister of finance for our banana republic!!!!!

  2. Stupid. Whats the definition of liquidity? According to this crook Mushore itd only wen councils dream of getting money for no services rendered. If l dont pay for non delivery of services and remain with cash in my bank account or pocket is that a liquidity crisis on me the consumer?. It actualy incerases liquidity in the market ciz disposable income inenge yawanda. Just say u want ti steal depositors funds once again don’t hide behind a fingure u prophet of domn. Silly

  3. keep quite mushore the thief this will benefit the poor who a majority of zimbabweans

  4. ”How do the service providers fund their operations if bills are not paid, where does the money to buy consumables come from?”. It is a simple question that Minister Chombo must answer before his directive is effected.

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