HARARE – The Nedbank Group says Zimbabwe remains a key market of focus for the financial services provider and is expected to sustain the firm’s growth in the medium to long term.
The South African financial services group operates in Zimbabwe through Nedbank Zimbabwe under the Nedbank Africa Regions (NAR), whose other operations are in Eswatini, Lesotho, Mozambique and Namibia, as well as representative offices in Ghana and Kenya.
Dr Terence Sibiya, group managing executive of Nedbank Africa Regions, said during a press briefing on Tuesday in Zimbabwe that the group would ride on foundations already put in place through the local unit.
“Zimbabwe will continue to be a significant contributor to the group’s overall growth, and should the dollar book continue to grow, we will gain the benefit of the net foreign income,” he said.
Dr Sibiya said the group was eagerly awaiting the Monetary Policy Statement (MPS), which is expected to provide clarity on exchange rate challenges and provide price stability.
“We would like to see what will happen in terms of what the functional currency will be, and we are eagerly awaiting the MPS, and that has an impact somewhat on how we then continue to co-direct business.
“Despite the fact that, by and large, most of our clients are now borrowing in USD in that market,” he said.
During the financial year ended December 31, 2023, Dr Sibiya said the group’s SADC operations delivered headline earnings (HE) of R662 million, up by 80 percent, and this was a result of strong revenue growth, which surged by 21 percent to R4 290 million, largely driven by an expansion in net interest margin (NIM) and net forex gains in Zimbabwe.
“This strong growth in revenue was achieved despite increased reserve requirements in Mozambique and muted economic growth across the regions,” he said.
He noted that SADC’s improved performance was attributable to net interest income (NII), which grew by 25 percent to R2 433 million, spurred by higher interest rates with NIM widening to 7,78 percent, loans and advances growth across most of the regions, and significant growth in the US dollar loan book in Zimbabwe, despite a marginal 2 percent decrease in average total loans and advances to R21 billion.
Dr Sibiya said the group’s subsidiaries are well-capitalised for the environments in which they operate, with capital requirements well higher than the respective host regulators’ minimum requirements. Dr Sibongile Moyo, managing director of Nedbank Zimbabwe, said the bank continues to play a significant role in its contribution to the group’s performance.
“Within the Africa region’s performance, we are glad we are a strong contributor to the group’s return on equity and overall performance,” she said.
Last year, Nedbank Zimbabwe partnered with American Express (AMEX) in an agreement that allows the bank to acquire merchants, enabling international American Express card members to use their cards in Zimbabwe.
The partnership enables AMEX card members to use their cards at both physical and online merchants, including tourist destinations, restaurants, and hotels that are acquired by Nedbank Zimbabwe.
Dr Moyo said the bank is pleased with the level of interest realised to date.
“The American Express product we launched was well-received by tour operators, top hotel chains, airlines, and restaurants, and we are quite pleased with the uptake.
“Additionally, the beauty of it is that not only can you use our product sale terminal for American Express, they also accept other international card programmes, such as MasterCard and Visa,” she said.
Dr Moyo said American Express is critical because 40 percent of visitors that come to Zimbabwe do carry their Amex card, and they were not able to use it up to this date.
“So uptake has been very good, and we are pleased with how we have just grown our client base in that sector as well as the deposit base,” she said. – Herald
