NEDBANK Zimbabwe recorded a 203% increase in profit after tax to ZW$186,33 billion for the year ended December 31, 2023, driven by increased lending in foreign currency, according to the firm’s financial statements.
Nedbank’s loans and advances rose by 428% to ZW$431,38 billion, at a time when banks were generally cutting back on lending, especially in foreign currency.
The rise was underpinned by loans to the private sector, which supported an overall growth of 182% to the bank’s net funded income.
In a statement attached to the financial statement, Nedbank Zimbabwe managing director Sibongile Moyo said non-funded income also saw a significant rise during the period.
“The bank's profit after tax increased by 203% to ZW$186,331 billion from ZW$61,419 billion over prior year. This growth was underpinned by the 428% increase in loans and advances to the private sector, which led to a 182% increase in net funded income (NII),” she said.
“Placement of excess liquidity in both ZWL (Zimbabwe dollar) and USD (United States dollar) money market instruments also augmented NII performance.
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“Non-funded income (NIR) from client transactions, excluding unrealised foreign exchange gains, grew by 191% due to increased number of active accounts, increased volumes of international payments and on our digital platforms, internet banking and ATMs (automated teller machines)”
Moyo said the overall increase of 251% recorded on NIR included unrealised foreign exchange gains of ZW$502,92 billion arising from the revaluation of the bank’s foreign currency net open position, as the local currency further depreciated.
“Operating costs, excluding impairment provisions and net monetary loss, grew by 152% over prior year, mirroring the trend in inflation and the disparate foreign exchange rates often applied on settlement of bills in ZWL,” Moyo said.
She said expense lines that contributed to growth included employee compensation and increased business volumes on the bank’s click based technology platforms.
"The adjusted cost to income ratio excluding monetary loss and net impairment expense stood at 27% compared to 37% in the prior year.”
Nedbank’s statement of financial position grew by about 89% to ZW$1,71 trillion compared to the prior year.
Moyo said this was mainly from growth in customer deposits and retained profits.
“Deposits from customers grew by 67% to ZW$763,265 billion due to real growth in the foreign currency deposits and in ZWL deposits. Loans and advances grew by 428% as we increased lending in foreign currency,” she noted.
“The bank’s non- performing loans and credit loss ratio were well maintained at 0,25% and 2,02% respectively. Capital adequacy ratio was 28%, well above the prudential guidelines of 12%.
“We remain cautiously optimistic about the prospects of the economy and businesses given the current trajectory, climate risks, global commodity market trends and policy interventions.
“Our business models continue to be challenged by the dynamic environment and changing consumer patterns. Our clients and stakeholders remain critical to our mutual success,” Moyo added.
Official exchange rate in December 2023 stood at US$1:ZW$6 104