HARARE – National Building Society (NBS) posted an impressive set of financial results for the year ended December 31, 2022, closing the trading period under review with a net surplus of $258 million despite realising a monetary loss of $37 million.
The surplus achieved for the year represented a 140 percent increase from $108 million recorded in the same period in 2020.
NBS board chairman Shingai Mutumbwa said the net surplus was a result of an increase in business both in loans and deposits.
“The increase in the net surplus was achieved on the back of increased total income, increase in loans and advances which enhanced net interest income and transactional activities through the Society’s digital and traditional channels,” Mr Mutumbwa said.
During the 2021 financial year, NBS saw its loans and advances increase to $2,78 billion from $779 million in the prior year, representing a 256,86 percent increase.
The bank also saw an impressive growth in deposits as they grew 259 percent during the year under review.
“Operating expenses increased by 62 percent in inflation adjusted terms to close at $929 million from $573 million in 2020,” Mr Mutumbwa said in a statement.
Despite the increase in operating expenses, the bank saw its cost to income ratio improve from 91 percent in 2020 to 76 percent in 2021.
Mr Mutumbwa added that, “The statement of financial position increased by 96 percent in inflation-adjusted terms to close at $7,07 billion.”
The chairman said capital preservation remains central to the operations of the bank.
The Reserve Bank of Zimbabwe set the minimum capital threshold for building societies at US$20 million for compliance by December 31, 2021 and NBS failed to meet the deadline but has assured stakeholders that they will be compliant by the close of the third quarter.
“The society did not comply with the minimum capital level, however, an extension was sought and granted to ensure full compliance by the 30th of September 2022. It remains committed and strategically positioned to be compliant with the new date after the finalisation of lined up internal activities,” NBS said in a statement accompanying results.
“The year under review witnessed the society continuing to perform commendably, with the initiation of the Great Leap Strategy focused at achieving substantial business growth. Preliminary outcomes of this strategic thrust have been positive, realising an increase in our active client base for both retail and business banking,” Mr Mutumbwa said.
NBS said it was also witnessing an improvement in client quality especially after the introduction of corporate and investment banking services as well as the undertaking of aggressive brand visibility and repositioning campaigns.
In the financial year ending December 31, 2021 product development was key to the performance attained with retail banking space, SME Value Chain Finance launched to provide business accelerator products and services.
This was in addition to the launch by the bank of the Ahoyi Tertiary Student Account and Instant Cash local remittances service.
The chairman added, “On a related note, the growth of the remittances business has become a key strategic focus and the society is positioning itself as a remittance aggregator. Two additional partners were added as international remittances partners to enhance our service options around forex cash pickup.”
Digitisation of the banking channels continues to be a principal focus of NBS with their investment in new technologies to provide innovative and customised services.
In their outlook Mutumbwa said, “Due to the rollout of the Covid-19 vaccination program in Zimbabwe and the world over, we expect an increase in production levels and capacity utilization in our economy and the rest of the world in 2022.
As National Building Society, we are ready to deliver innovative and affordable housing solutions and other financial solutions under a dual currency regime.” – Herald