The year under review for the sector at large was characterized by a fragile macro-economic environment. Periodic restrictions and business lockdowns implemented by the Government and health authorities to curtail the spread of the COVID-19 pandemic dampened economic growth momentum. Yields on interest earning assets remained depressed in real terms as inflation picked up within the last quarter of the year. Despite this, net interest income for NMBZ posted a 346% growth y/y from ZWL$410.58mn to ZWL$1.83bn, supported by asset growth of 173%. Loans and advances surged within the period to ZWL$11.85bn from ZWL$3.73bn with a growth of 355% recorded in within the retail portfolio. The bank continued its aggressive drive to leverage on digitization of its services with fees and commission income increasing 259% y/y to ZWL$2.93bn. Resultantly, the Group recorded a 160% y/y growth in revenue to ZWL$6.94bn in FY21 from ZWL$2.67bn in FY20. Inflationary pressures largely driven by exchange rate deterioration increased the cost of running the business. Cost -to- income ratio consequently rose to 40.9% in FY21 versus 30.5% in FY20 as operating expenditures ballooned 249% to ZWL$2.84bn. NMBZ’s balance sheet remained resilient with strong inflows in personal and commercial deposits following the easing of Covid-19 restrictions (198% y/y) to ZWL$19.09bn. Demand for credit in the period remained firm with loans mainly with individuals and households at 28% (FY20 - 16%) and agriculture sector at 22 % (FY20- 23%). The Bank signed a US$15mn credit line with a developmental finance partner which is currently being disbursed in selected long-term projects in the agricultural sector. This is up and above another line of US$20mn from a regional funder which was fully utilized. Loan to deposit ratio for NMBZ improved y/y from 58% to from 67% whilst NPL’s in the period registered an uptick from 0.44% to 1.33%. The capital adequacy ratio of the banking subsidiary remained at 57% compared to a regulatory minimum of 12% and the banking subsidiary was able to meet the minimum capital of the equivalent of US$30mn. The Board has declared a final dividend of ZWLc38.61 per share. This brings the total dividend for the year ended 31 December 2021 to ZWLc43.61 per share. A detailed dividend announcement will be published separately ...
