NMB stockpiles Govt commercial paper

 NMB stockpiles Govt commercial paper
Published: 02 May 2019
NMBZ Holdings has increased its portfolio of Treasury Bills (TBs) by 27,1% during the year to December 31,2018 to US$117,2m. In 2017, the group's TBs holding stood at US$92,2m.

The financial results from the Zimbabwe Stock Exchange listed company, which also has a secondary listing on the London Stock Exchange, show that of the total amount held by the financial institution, TBs worth about US$11,4m have a tenure of more than five years, while US$57m worth of TBs have a tenure of between one year and five years.

TBs worth about US$43m have tenure of six months and one year while US$6,1m worth of TBs will mature  between three and six months. The balance was maturing between one months and three months.

Government has been issuing TBs into the market to finance its activities. Recently is issued out about $20m worth of TBs into the market.

Government, however, has been struggling to liquidate the stock of TBs that have matured and have been negotiating with TB holders to extend the tenure of the commercial paper worth about $2,2bn TB stock that matures this year.

"The group holds Treasury Bills amounting to US$117 693 825 with interest rates ranging from 2% to 10%," said Benefit Washaya, NMBZ chief executive officer.

"The Treasury Bills are measured at amortised cost in line with the bank's business model to collect contractual cashflows and the contractual terms are such that the financial assets give rise to cashflows that are solely payments of principal and interest."

He said TBs amounting to US$85 415 837 had been pledged as security against interbank borrowings.

NMBZ Holdings recorded a US$21,2m profit during the year to December 31, 2018 from US$9,9m recorded in the previous year, driven by  the company's continued diversification into the broader market segment and enhanced use of its digital offerings as well as stricter credit underwriting standards and containment of non-performing loans.

Operating expenses increased by 26% to US$34,7m from US$27,6m, an increase attributed to increased transaction processing and operational costs arising from the bank's digital thrust and general inflationary pressures largely driven by foreign currency shortages.

Total assets increased by 25% to US$527m during the period under review from US$422,6m recorded in the prior year.
- businesstimes
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