Paul Nyakazeya, Group Digital Editor 
NEDBANK Zimbabwe (Nedbank) recorded significant growth in 2021, achieving a profit after tax of $904 million, a 342 percent increase from $204 million in the prior year.
The increase was buoyed by a 99 percent growth in funded income on the back of increased lending to the private sector and investments in government securities.
Sibongile Moyo, Nedbank managing director
Nedbank managing director Sibongile Moyo said the contribution of funded income from lending increased to 26 percent of total revenue from 13 percent prior year.
“Non funded income from customer transactions grew by 19 percent over prior year, with the contribution from digital revenue streams growing to 23 percent of total income up from 15 percent. The contribution of foreign exchange gains to total income declined to 13 percent from 37 percent in 2020,” she said in a statement accompanying the financials.
She noted that foreign exchange transaction gains decreased by 64 percent over prior year, reflecting a slower pace of depreciation of the Zimbabwe dollar against major currencies. Operating costs excluding net monetary loss and net impairment losses increased by 21 percent mainly due to increased business volumes, Covid-19 containment costs and inflationary pressures.
Nedbank’s employee costs increased by 23 percent as management implemented measures to cushion staff.
“Whilst cost to income ratio (CIR) improved to 75 percent with the reconfigured business model covering operating costs comfortably from annuity income compared to prior period loss, our medium-term target is to achieve CIR below 50 percent by continuously reviewing sustainability,” Moyo said.
The bank’s balance sheet grew by seven percent to $24,5 billion due to a six percent growth in customer deposits growth anchored by increased transactional flows and growth in fixed deposits.
Interest earning assets increased to 40 percent of the total balance sheet, up from 22 percent in prior year, with loans and advances growth at nine percent. Nedbank’s credit loss ratio and non-performing loans were maintained at 1,7 percent and 2,23 percent respectively.
“Capital adequacy ratio increased to 29 percent from 22 percent in prior year and was well above the prudential minimum of 30 percent. Return on equity at 33 percent outpaced prior year ROE of 10 percent and was well ahead of cost of equity,” Moyo said.
newsdesk@fingaz.co.zw
