NMBZ in drive to diversify operations

Source: NMBZ in drive to diversify operations | The Herald

All the areas NMBZ intends to diversify into are currently either units or sections within the current banking operations.

Tapiwanashe Mangwiro-Senior Business Reporter

Zimbabwe Stock Exchange (ZSE) listed financial services provider NMB Zimbabwe (NMBZ) has embarked on a group structure broadening exercise to grow and diversify its business operations.

Group chief executive officer Gerald Gore, in a statement accompanying financial results, said, “We are in the process of broadening our group structure and this will include in due time, setting up new subsidiaries to complement our traditional banking activities.”

All the areas the bank intends to diversify into are currently either units or sections within the current banking operations.

Mr Gore said the strategy was aimed at building resilience in the current model and allow NMBZ to take advantage of opportunities in other related sectors.

The bank pointed out that shareholders would not be obligated to fund the operation “The diversification strategy will be funded through organic capacity without going back to shareholders for a capital raise,” Mr Gore said.

The banking group has vowed to manage the impact of volatility within the market through value preservation as a way of protecting the group’s capital.

NMBZ emphasized that its intention is to meet current and future capital requirements from internal sources. Capital adequacy is currently at 22,28 percent against a regulatory requirement of 12 percent.

Board chairman Benedict Chikwanha said, “The focus for the bank has been on growing foreign currency denominated income both on interest and non-interest income. We are focusing on key export sectors such as horticulture, agriculture, mining and manufacturing.”  

This comes as the bank signed a e12,5 million line from EIB which they are channelling to exporters and said they are looking for more credit lines to further broaden their support to the economy.

“Our MTA (money transfer agency) business is growing and we have set up a dedicated centre for the ease of our customers. An agency network is being set up to broaden the distribution network. We currently partner the major MTA remittance partners in the market,” Chikwanha added.

NMBZ recently launched multiple agents under the bank’s bancassurance operations and now has five partners in Old Mutual, Zimnat Insurance, Alliance Insurance, Cell Insurance and NicozDiamond to underwrite the bancassurance business thereby giving customers more options and value for money.

Despite the economic challenges currently bedevilling the economy, the bank said the mining and construction industry continues to show signs of resilience and recovery. Mining and construction are projected to grow by 9,5 percent and 10,5 percent respectively on account of higher commodity prices and government infrastructure projects.

In the outlook, the group expects to continue delivering a strong performance in the second half of the year driven by utilisation under the various US dollar credit line facilities.