NMBZ Holdings Limited reported an inflation adjusted performance for the nine months to September 30, 2019, which showed a loss of $69,3 million.
The report comes after the Institute of Chartered Accountants of Zimbabwe issued a set of guidelines last month for implementing financial reporting in hyperinflation reporting under IAS 29. It would allow companies to refer to an implied annual inflation rate and prevailing exchange rate in preparing financial statements.
“The profit before taxation was $146,1 million for the period under review (30 September 2018 — $72 million) and this gave rise to total comprehensive income of $109 million (30 September 2018 — $54,3 million),” NMBZ said in a statement.
“The Group achieved a basic earnings per share of 27,21 cents (30 September 2018–13,88 cents) and a headline losses per share of 5,98 cents (30 September 2018 — headline earnings of 13,48 cents).”
Group’s chief executive, Benefit Peter Washaya said the performance was largely driven by translation gains on foreign currency balances, investment properties fair value gains as well as fee and commission income.
“And these were partly offset by the loss on net monetary position arising from the hyper-inflationary accounting basis adopted by the Group,” he said.
Operating expenses amounted to $89 million for the period under review and these were down 83% from the restated $512,8 million in the comparative 2018 period.
“The loss on net monetary position of $69,3 million occurred as a result of the restatement of amounts to current value. The adjustment is based on the inflation index provided by the Zimbabwe National Statistics Agency (ZimStat) or inflation index derived from the monthly inflation rates published by ZimStat,” NMBZ said.
“The loss has been charged to the income statement in accordance with the International Accounting Standard 29 (IAS 29), Financial Reporting in Hyperinflationary Economies.”
The group’s total assets decreased 42% from the restated $1,7 billion as at December 31, 2018 to $1 billion as at September 30, 2019 mainly due to a 60% decrease in loans, advances and other assets.
“A 77% decrease in intangible assets and an 81% decrease in investment securities and these were partly offset by an increase of 154% in property and equipment and a 57% increase in investment properties,” NMBZ said.
“Gross loans and advances decreased by 60% from the restated $857,8 million as at December 31, 2018 to $259,6 million as at 30 September 2019 due to loan repayments as well as a slowdown in advances during the period under review in view of the prevailing economic
conditions.”
The bank has continued with its drive to reduce non-performing loans (NPL) and this saw the NPL ratio reduce from 7,43% as at December 31, 2018 to 3,41% as at September 30, 2019.
The drop in the NPL ratio is largely due to aggressive collections and stricter credit underwriting standards.
Washaya said the bank’s focus remains at increasing its customer base and transactional volumes anchored on the Bank’s digital strategy.
“In order to fund he growth initiatives being pursued by the group, the board resolved not to declare an interim dividend,” he said. – News Day
