NMBZ achieves pre-tax profit of $6, 2 million

– NMBZ Holdings posted a profit before taxation of $6, 2 for the year ended December 31, 2016.

Its banking subsidiary – NMB Bank – achieved after tax profit of $5, 1 million compared to $5, 5 million previously. Addressing analysts last week CEO Mr Benefit Washaya drew attention to the difficult operating environment.

He said chief among the challenges was the shortage of funds in nostro accounts, the cash shortages and company closures. Additionally, interest rates had been capped and transactional and plastic money fees had also been controlled.

Mr Washaya said while there had been a negative effect on the bank’s earnings from caps on interest and transactional charges, these measures were good for the economy.

“When interest rates become affordable, companies come forward to borrow, more jobs are created, businesses operate profitably, resulting in more taxes being paid, which is good for the economy,” he said.

The bank had a capital adequacy ratio of 23, 3 percent, compared to 19, 3 percent the previous year against the regulatory minimum of 12 percent. Its liquidity ratio was 40, 1 percent, compared to 30, 4 percent in 2015 against the regulatory minimum of 30 percent.

Non-performing loans (NPLs) ratio during the period under review stood at 10, 7 percent, which was down from 13, 2 percent at the end of 2015. Management is targeting to reduce this to 5 percent by the end of this year.

Operating expenses had been reduced by 3 percent as a result of cost cutting and containment measures. The CEO said the bank now had lines of credit amounting to $35 million dedicated to exporters, after securing a $15 million line of credit last year from two European developmental financial institutions.

The group’s shareholder’s funds stood at $54, 7million at the end of 2016.

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