NMBZ Holdings (NMB) is targeting a cumulative capital outlay of US$10 million for its property division to operate as a standalone business unit.
The financial services company officially launched its fully-fledged property division, Property Development Company last year as part of diversification efforts but it remained as part of the group’s banking unit.
Local banks have been investing heavily in housing and property development as a hedging strategy against inflation but demand for their products has been subdued due to the high fees and interests associated with mortgages.
In an interview with The Financial Gazette, NMB Bank chief executive Gerald Gore said the strengthening of the property division is in line with the group’s growth strategies.
NMB’s inflation adjusted operating income rose 203 percent to $1,3 trillion for the first quarter ended March 31,2024 compared to $429 billion in the prior year.
“We are now just scaling it up, so you find the investments are not as huge because it is like an offshoot of what was already happening. The property already had a real estate vision,”
“We are just getting it out to become a standalone company. The property company, for example, capitalised it to the tune of US$3,5 million. We are going to increase that to US$10 million, largely in the form of properties, but they have had enough work for two years or so,” Gore said.
Affordable housing will remain a top priority for the residential market due to growing public and private sector support.
Population expansion is causing the supply-demand imbalance, especially in the outlying areas of major cities and satellite towns where the majority of construction activity is taking place.
The local brick manufacturing industry is benefiting from the ongoing construction boom after recording a surge in demand driven by the government’s infrastructure and national housing projects.
As for the financials, NMB’s inflation adjusted operating income rose 203 percent to $1,3 trillion for the first quarter ended March 31,2024 compared to $429 billion in the prior year.
This was attributed to higher transaction volumes, a wider range of products and a solid balance sheet with assets denominated in US dollars, which supports foreign exchange profits.
Gore said the bank is slowly building a “digital supermarket” which enables easy transacting for customers.
“I would say the digital has been contributing quite significantly, and obviously the lending, so we still do intermediation, and lines of credit come in handy because they help us support customers,” he said.
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