NMB Holdings Limited has significantly bolstered its access to offshore credit lines, successfully raising over US$65 million in 2024 and establishing a strong foundation to draw down an additional US$100 million in 2025.
This strategic influx of funding has been instrumental in supporting the bank's expanding loan portfolio, despite the fact that nearly all lending remains denominated in United States dollars, highlighting the enduring dominance of the greenback within the nation's credit market.
Chief executive officer Gerald Gore underscored the group's deliberate strategy to structure customised funding solutions for its clientele, particularly exporters.
"The target is to structure appropriate funding for our clientele base, with the bank well on course to drawdown US$100 million from different providers of offshore lines of credit in 2025," stated Mr Gore in the group's full-year 2024 financial results.
In 2024, NMB secured direct funding and trade finance limits from several Development Finance Institutions (DFIs), including US$25 million from France's Proparco, US$10 million from the UK's BII, and US$15 million each from the Trade and Development Bank (TDB) and the African Development Bank (AfDB).
These capital inflows have played a crucial role in the bank's growing presence in foreign currency lending, particularly within sectors driven by exports.
NMB board chairman Pearson Gowero affirmed the impact of this funding strategy in his commentary.
"Loans and advances stood at ZiG2.8 billion as at December 31, 2024, up from ZiG2.2 billion as at December 31, 2023. The increase is largely attributable to the deployment of foreign credit lines in funding exporters in various sectors of the economy," he stated.
According to the financial statements, fixed-term corporate loans experienced a slight dip to ZiG1.39 billion, while retail loans saw a significant rise to ZiG758 million, indicating increased household credit uptake.
While the increase is reflected in local currency terms, Mr Gowero clarified that approximately 99 percent of the bank's loans are USD-denominated. This signifies that the loan growth, although reported in the recently introduced ZiG currency for accounting and regulatory purposes, essentially mirrors hard currency lending. This trend underscores the continued semi-dollarised nature of Zimbabwe's economy.
The maturity analysis presented in the financial statements supports this growth trend. Loans maturing within 1 to 5 years surged to ZiG1.5 billion in 2024, nearly doubling from ZiG792 million in 2023, indicating that a significant portion of the bank's lending is now structured for longer-term financing.
Total inflation-adjusted loans and advances grew to ZiG2.97 billion in 2024 from ZiG2.15 billion in 2023.
However, the bank has also witnessed an uptick in expected credit losses (ECLs), with impairment allowances rising to ZiG183 million in 2024 from ZiG96 million the prior year. The ECL charged through profit or loss doubled to ZiG87 million, while write-offs declined.
These trends reflect heightened risks in the operating environment, with a few corporates facing financial distress contributing to a marginal rise in non-performing loans (NPLs) to 3.4 percent, still below the sector benchmark of 5 percent.
Despite these risks, NMB maintained strong liquidity, consistently above the 30 percent statutory minimum. This is crucial in a market where confidence is closely tied to currency and policy stability.
Beyond banking, the group continues to pursue a diversification strategy. Mr Gore noted that the two new subsidiaries launched in 2023, one in technology and the other in property, are now fully operational, with the bank eyeing regional markets through its tech arm.
"The group remains on a growth trajectory with focus on bolstering the core banking business, establishing wider regional presence with the technology subsidiary and consolidating balance sheet growth through the property company," he said.
The sectoral analysis reveals a notable shift in utilisation patterns. Agriculture retained the largest share at 33 percent (ZiG930.7 million), up from 31 percent the previous year, reflecting sustained support for primary production. Lending to individuals more than doubled to ZiG755.5 million, accounting for 27 percent of the book, up from 17 percent in 2023, highlighting a strategic pivot towards consumer financing. Services and other sectors experienced a steep decline from 16 percent to just 4 percent, suggesting a deliberate reallocation of lending priorities. Manufacturing and conglomerates also saw upticks, while mining's share shrank slightly.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
The increase in overdrafts, from ZiG658 000 to nearly ZiG593 million, further signals heightened short-term liquidity demands, possibly due to inflationary pressures.
NMB's lending trends depict an institution recalibrating towards individual borrowers and primary sectors amid evolving economic conditions.
Overall, NMB's 2024 performance underscores the critical role of foreign capital in sustaining Zimbabwe's formal lending sector. Even with the formal reintroduction of the ZiG currency, real credit activity remains rooted in USD transactions, a reflection of both borrower preference and lender risk management in a semi-dollarised economy. The bank's ability to secure substantial lines of credit from DFIs positions it well to meet the needs of export-driven clients and maintain a competitive edge in the current economic landscape.
