Published: 05 March 2018

MBCA Bank reported a 40 percent increase in profit after tax to $7,8 million for the year to December 31 2017 from $5,6 million recorded in 2016.

The Nedbank subsidiary said the profit was achieved due to a 19 percent rise in non-interest income supported by increased volume of transactions on new products and enhancements on the global market.

The bank also benefited from volatility of some currencies as a result of developments on the global market.

Net interest income increased from prior year position of $15 million to $16,5 million.

MBCA managing director Charity Jinya said an increase in Afreximbank Trade Debt Backed Securities (Aftrades) and reduction in interest expenses accounted for the bulk of the improved performance.

"While there was an addition of one branch, improved cost management measures continued to be implemented resulting in a two percent decrease in total operating expenses against revenue growth of percent on prior year," she said.

During the period under review, MBCA's total assets grew significantly by 23 percent to $369 068 from $298 896 mainly as a result of the bank's investment in Aftrades and Treasury bills.

Net loans and advances to clients constituted 27 percent of the total assets compared to 32 percent in 2016 while cash and cash equivalent decreased to 46 percent from 57 percent in 2016.

"Total deposits also registered a significant growth of 26 percent to $297 444 million in line with the bank's strategic deposit mobilisation initiatives to support asset growth," Jinya said.

MBCA is this year rebranding to Nedbank Zimbabwe Limited in an effort to leverage on the benefits from Nedbank Group brand equity.

"The rebranding will also position the bank appropriately against other international and regional banks operating in the Zimbabwean market," MBCA chairperson Willard Zireva said last Friday.

Zireva said the banking sector remained stable last year despite the cash and foreign currency shortages in the economy.

"The resilience of the sector was due to adequate capitalisation, successful adoption of digital payment platforms and improved earnings.

"The economy continued to grapple with limited nostro balance availability and trade deficit challenges. As at November 2017, the trade deficit stood at $1,4 billion," he said.

In line with market developments, the bank experienced significant growth in the volume of transactions on digital platforms.

This put a strain on the system resulting in the challenges affecting the digital channels.

Year-on-year increase in volumes on card-based channels was over 400 percent.

A number of system upgrades were undertaken last year and developments were carried out to ensure that the system remains stable and is optimised to meet the increased volumes and future growth.

The thrust is to continue to invest in digital platforms so as to continually improve service delivery and increase operational efficiencies.

"Plans are underway to replace the core banking system and internet banking system as well as launching the VISA/Master Card acquiring solution in order to continue meeting the changing demands of customers in 2018," said Zireva.

The wholesale division accounted for 33 percent of the total operating income for the year ended December 31, 2017.

Some of the clients continued to access part of the off balance sheet Nedbank direct line of credit of $75 million and Afreximbank's line of credit for commodities of $22,5 million.

"These facilities alongside the bank's resources permitted the bank to offer sufficient working capital to clients," he said.

The Treasury division experienced positive variances in comparison to the prior year.

The contribution of 25 percent of the bank's total operating income realised was mainly attributable to exchange and dealing profits earned as a result of currency volatility experienced over the year.

- The Financial Gazette

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