BY TAFADZWA MHLANGA
THE National Building Society (NBS) says it has applied strict cost repression measures in order to contain the effects of inflation.
Zimbabwe’s inflation rate has been on the rise and quickened further after the liberalisation of the exchange rate on February 20, 2019 when the Reserve Bank of Zimbabwe scrapped the 1:1 rate against the US$.
Since then, the local currency has been devaluing against the US$ and prices of goods have been escalating almost on a daily basis.
Before the government suspended the publication of annual inflation figures in August, inflation stood at 176% in June.
However, renowned American economist Steve Hanke’s latest figures posted on Twitter last Thursday put Zimbabwe’s inflation rate at 825%.
“The Society has had to re-configure and implement stringent cost containment measures top contain the effects of inflation,” NBS chairman Stanley Kudenga said in a statement accompanying the bank’s financial results for the half year ended June 30, 2019.
The financial institution reported total income of $13,9 million compared to $567 113 recorded in the previous year.
Net interest income was $4,2 million from $3,7 million in the prior period.
NBS’ loan book increased by 16% after its net loans and advances reached $94,991,387 compared to $81,596,257 in the previous year ended June 30, 2018.
“Despite the prevailing conditions in the macro-economic environment, the society’s loan book has grown by 16%,” Kudenga said.
The bank’s total assets increased by 4,2% after it had a total of $247,809,479 in the period ended June 30, 2019 compared to a total of $237,624,342 that was restated on December 31, 2018.
The bank’s investment properties also increased 208% propelled by revaluation of land purchased in December 2016.
Cash and cash equivalent dropped significantly to $2,6 million from $12,1 million last year at the same time and this was attributed to fiscal and monetary measures taken by the authorities.
“Due to the endorsement of several monetary and fiscal policy reforms which have led to the decrease in liquidity and led to the increase of inflation rates in the macro-economic environment and for the Society, it has slowed down the balance sheet to 4% in 2019 compared to 10% in the same period in 2018,” Kudenga said.