HARARE — Financial services group, NMBZ Holdings has warned of a loss for the full year to December 2013, citing “an acceleration in impairments on loans and advances” at its flagship commercial banking unit.
“The board has reviewed the banking subsidiary’s loan book and has consequently increased the impairment losses on loans and advances.
“This will have a material impact on the results for the year ended December 31 2013 and the group will record an attributable loss for the period,” the group said in a profit warning on Friday.
The market seemed to ignore the warning, with the share price remaining stable at 6,50 cents with no trades, although sellers offered it at seven cents.
NMBZ’s warning follows an announcement by the Reserve Bank of Zimbabwe barring banks from extending insider loans without approval from the central bank, a move meant to contain bad loans.
A recent survey by an advisory and brokerage firm showed that local banks had one of the highest non-performing loan ratios in sub-Saharan Africa, with bad debts at $500 million, constituting 13,8% of the $3,67 billion loan book in the first half of 2013 due to an underperforming economy.
“Notwithstanding the negative impact of the above-mentioned impairment losses on loans and advances, the capital position of the bank remains above the regulatory minimum.
“In addition, the capital adequacy and liquidity ratios for the banking subsidiary remain above regulatory minimums,” NMBZ said.
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Last November, the Reserve Bank placed seven financial institutions under corrective order amid concerns that the banks were facing solvency problems triggered by bad loan books.
– The Source
