REGIONAL financial services group, Nedbank this week said it had no plans to exit the Zimbabwean market despite challenges the country is experiencing.
The group said Zimbabwe was one of key markets driving its positive performance.
Nedbank’s financial statements on Tuesday showed its local unit’s balance sheet hedged against hyperinflation and currency devaluation through a United States dollar-denominated open position, resulting in forex gains offset by a net monetary loss.
“We have been in Zimbabwe since 1999 and have no plans to exit the market despite the challenges, hyperinflation, price volatility and so on,” Nedbank group managing executive for Nedbank Africa regions Terrence Sibiya commented on the results for the six months ended June 30 2023.
“We see long term prospects for Zimbabwe. Even as we speak now, the gross domestic product (GDP) growth for Zimbabwe is much better than South Africa.”
Sibiya said there were specific sectors like energy infrastructure and trade finance that still offered opportunities to the bank, adding that the group's management will pursue that regardless of economic challenges in the country.
Sibiya said agriculture was also a big niche for the group.
“So, as a local operation, as difficult as it may be, we still have long term prospects in Zimbabwe given the fact that there is still growth potential,” he said.
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During the period, however, the group saw a weaker Zim dollar to US dollar, a weaker South African rand to US dollar, a net US dollar capital position and hyperinflation accounting leading to higher unrealised forex gains. Hyperinflation in Zimbabwe, however, led to higher net monetary losses.
Nedbank Zimbabwe managing director Sibongile Moyo said the banking space in the country had no finance for mortgage lending due to lower deposits.
This comes as it emerged last week that the development of the real estate sector was being threatened by lack of mortgage funding with experts expressing concern about the mushrooming of squatter camps in Harare as the standard of housing continues to decline.
Responding to a question on the bank's position on mortgage financing, Moyo said while the bank wanted families to access funding and allow them to build homes, the bank had no such financing.
“Mortgage funding is really a function of proper funding that we have. We don't have long term funding whether in Zim dollar or foreign currency to offer proper mortgage products,” she said.
“I'm sure in your own banks you can probably be offered five- to seven-year year mortgages and that is not proper mortgages, we just call those medium term loans. It all needs deposits in the current account but we don't have those to allow us to extend such funding.”
