MBCA Bank — the local subsidiary of South African banking group Nedbank — says it has commenced the implementation of an employee share ownership scheme that will result in its workers ultimately taking up a 7,5 percent stake of the local entity.
MBCA managing director Dr Charity Jinya said the process of awarding shares to employees had started in FY2016.
“In line with the bank’s indigenisation plan, employees were awarded shares during the year. This will result in employees owning 7,5 percent of the bank’s shares through the Employee Share Scheme upon conclusion of the plan,” she said.
Zimbabwe’s indigenisation law — the Indigenisation and Economic Empowerment Act (Chapter 14:33) requires foreign firms operating in the country to cede 51 percent of equity to indigenous investors.
But the local financial sector is under the Banking Act, which is regulated by the Reserve Bank of Zimbabwe.
And authorities are on record saying that foreign banks’ compliance modalities would be different from those of the other sectors.
Meanwhile, in respect of MBCA’s financial performance for the year ended December 31, 2016 profit-after-tax declined three percent to $5,6 million from $5,8 million in the prior year.
Net income interest increased marginally by 1,8 percent, while non-interest revenue grew by a “satisfactory” 17 percent.
“The growth in non-interest revenue was mainly on the back of the volatile movements of some currencies,” said Dr Jinya in a statement accompanying the results.
The bank’s total operating expenses increased by 23 percent largely due to an increase in the impairment charge of 417 percent as a result of a single significant provision, and an increase in staff costs of 14 percent as the committed to an expansion in footprint, said management.
During the period under review, MBCA’s balance sheet grew to $298,8 million from $243,8 million, which management attributed to bank and cash balances which rose 50 percent during 2016.
Net loans and advances to constituted 32 percent of the bank’s balance sheet, compared to 42 percent in 2015, while cash and equivalents increased to 57 percent from 46 percent in the prior year.
Total deposits grew significantly by 23 percent to $236,7 million from $193,2 million