Wednesday, September 21 2022

NBS building

Mortgage lender the National Building Society (NBS) said yesterday it was confident the rate hike announced in May to fight inflation would recalibrate the economic landscape as its financial statements showed interest income inflation-adjusted assets increased 141% to $756 million during the six-month period. as of June 30, 2022.

Unfunded revenue rose 267% to $2.5 billion, a trajectory reported by several lenders where banks generated more revenue from fees, compared to loan interest.

However, in a comment on the financials, NBS chairman Shingai Mutumbwa said the lender was monitoring market reaction to the bold move in its loan portfolio.

The NBS boss was reacting to a hike in the Reserve Bank of Zimbabwe’s key rates to 200% as authorities scrambled to rein in runaway inflation.

The policy rate was previously 120%.

But even then, it had already sparked concern in Zimbabwe’s financial system, as banks said it lag far behind the annual inflation rate.

Authorities were walking a tightrope as turbulent interest rate hikes exposed financial institutions to a further rise in non-performing loans, as well as restrained spending, which could end the recession.

Major global institutions, including the World Bank, warned this weekend of prolonged downturns in 2023, after central banks around the world continued on a similar trajectory.

“We look forward to an improvement in the second half of 2022 given the government’s efforts to stabilize the economy,” Mutumbwa said.

“The company remains positive about the effects of the regulator’s review of savings and credit interest rates in managing inflationary pressures while closely monitoring the impact on the loan portfolio.

“The company continues to respond to market dictates and scan the environment for opportunities that will enhance deposit mobilization coupled with the growth of a lending portfolio of quality assets.”

During the period, NBS reported a net surplus of $1.59, a significant increase from the $24.8 million recorded during the comparable period in 2021, after total revenues increased by 245% to reach $3.14 billion, compared to $911 million recorded in the same period last year. year.

Operating expenses also increased.

NBS chief executive Tapera Mushoriwa said the company was focused during the review period on ambitious growth strategies set out under the lender’s 10X strategy.

“Aware of this strategic imperative and in pursuit of the 10X strategy, the company has established a fully-fledged corporate banking unit to offer a full range of corporate and structured finance services. The unit has resulted in strategic partnerships with public and private companies and added value for society,” he said.

The company prioritized housing projects during the period under review.

He said he was working to resolve the traffic jams that had delayed the Dzivarasekwa project in Harare, while the Tynwald cluster housing project is due to be completed by December.

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