Banks tighten grip on loan books

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By Alois Vinga

LOCAL financial institutions have gone out of their way to reduce the value of non-performing loans as the economy continues to sneeze.

National Merchant Bank board chairman, Benedict Chikwanha said that his bank is winning the war against non-performing loans (NPLs).

“The bank has continued with its drive to reduce NPLs which has seen the ratio reduce from 7.43 % as at 31 December 2018 to 3.38% as at 30 June 2019. The drop in the NPL ratio is largely due to aggressive collections and stricter credit underwriting standards,” Chikwanha.

Agribank chief executive, Sam Malaba echoed similar sentiments revealing his bank continues to make remarkable progress in strengthening credit assessment processes as well as debt recovery.

“Reflecting the sustained debt recovery initiatives and more prudent lending, the NPL ratio improved from 9 % in December 2018 to 8 % as at end of June 2019.The bank will continue implementing measures for enhanced credit granting systems, as well as multi-pronged debt recovery initiatives,” said Malaba.

Standard Chartered’s chairman, Lovemore Manatsa said government’s recent decision to discontinue the multi-currency system and designate the local currency for the first time in a decade had necessitated an upward review of fees and commissions to sustain operations.

He said that the introduction of the local currency saw the bank reviewing its product lines to fulfill customer needs and operating costs.

The quality of the bank’s loan book continued to improve as reflected by the significant reduction in the non-performing loans ratio from 2.1% as at 31 December 2018 to 0.7 % as at June 2019.

Diversified financial services group, ZB Bank saw its loan book growing by 120 % from $152.2 million at 31 December 2018 to close at $334.2 million at 30 June 2019.

“The non performing book for the group at $3.9 million was 44% lower than $7m as at 31 December 2018. The resultant non- performing loans ratio for the half year ended 30 June was 1.2%, an improvement from 4.6% reported as at 31 December 2018.

“Total deposits grew by 23% from $433 million as at 31 December, 2018 to close at $533.8 million as at 30 June, 2019,” said the group’s chief executive, Roy Mutandagayi.