NMBZ Holdings Limited is targeting a 15% non-performing loans (NPLs) ratio by year end from 20% as at June as the group is embarking on various measures to reduce the ratio.
VICTORIA MTOMBA BUSINESS REPORTER
An NPL is when payments of interest and principal are past due by 90 days or more, or at least 90 days of interest payments have been capitalised, refinanced or delayed by agreement.
Speaking at the group’s annual general meeting (AGM) yesterday, NMB Bank Limited managing director Benefit Washaya said the bank would adopt a conservative approach and will lend to customers with a higher credit rating.
“We have continued to focus on the bank’s non-performing loans and we are targeting an NPL ratio below 15% by 31 December 2014. We are in the process of implementing credit management system which we expect to go live by 30 September 2014,” Washaya said.
As at June, the bank’s NPLs were at 20,01% of the total loans.
NPLs in the banking sector have risen from 1,6% in 2009 when the country adopted the multi-currency to 18,5% ($705 million) as at June 2014.
In his maiden monetary policy statement, Reserve Bank of Zimbabwe (RBZ) governor John Mangudya said Cabinet had approved the setting up of a national special purpose vehicle, the Zimbabwe Asset Management Corporation (Zamco) to buy NPLs from banks.
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Mangudya said Zamco, in acquiring the NPLs, will clean up and strengthen banks’ balance sheets and “provide them with the liquidity to fund valuable projects for the economy to rebound and to mitigate loss of confidence”.
Washaya said in the first half of the year, the group recorded an attributable profit of $1,4 million compared to a $3,3 million attributable loss recorded same period last year.
Washaya said post June 2014 the economy has continued to show signs of deterioration due to the illiquid market that has resulted in an increasingly difficult operating environment for all economic players.
“The performance of the group to 31 August 2014 has been below budget. The performance has been adversely affected by tightening interest margins and the poor performance of the economy,” he said.
He said the group has launched a mortgage product that will assist in improving the overall quality of the loan book.
Washaya said a new branch would be opening in Kwekwe.
Meanwhile the group’s shareholders yesterday went for polls to re-elect directors, the first time it had done so in its history.
Shareholders re-elected board chairperson Tendayi Mundawarara, Julius Makoni, Ben Zwikels, Benedict Chikwanha, Cheikh Ndiaye, Maureen Svova and Rodger Keighley.
Mundawarara said he would be stepping down after this year having served as NMBZ’s board chairperson for five years.
“I have the pleasure of serving this company as chairman for close to five years now. I believe five years is as long as anybody can add value to an organisation. During the course of the coming year, I will be stepping down from the chair,” he said.
