- Nedbank’s financial results for the year ended 2020
- Nedbank records ZWL1.1 billion profit
- Nedbank had the most POS ZimSwitch transactions in 2020
Nedbank released its financial results for the year ended 31 Dec 2020. The bank reported a significant growth in deposits made into the bank with a 23% increase to ZWL11.3 Billion from ZWL9.2Billion in the prior year.
Banks make money primarily by borrowing from depositors and compensating them with a certain interest rate and security for their funds then lending it out to borrowers or loan applicants on a higher interest rate thus profiting from the interest rate spread. Hence a significant growth in deposits for Nedbank means more operating revenue for the bank and it recorded an increased profit total of ZWL1.1 Billion after a poor 2019 where the bank recorded a low ZWL198 Million.
However, banks in Zimbabwe are making more money from non-funded income. Non funded income or non-interest income is a bank and creditor income derived primarily from fees including deposits and transaction fees, annual fees, monthly account service charges, inactivity fees, credit card fees, checking balances and savings account fees so the increase in active bank accounts surely had a huge impact on the bank’s profitable year.
Globally, technological changes (the fourth evolution) greatly changed the way we carry out our daily activities together with business. In financial services, the need to visit a physical branch is becoming more unnecessary as transactions are now largely online-based giving rise to income earned from nun-funded earnings.
The growth of non-funded income was further accelerated by the novel coronavirus pandemic containment measures as movement was restricted and people were forced to rely on online banking systems and payment methods.
If there is one thing that the covid 19 pandemic has taught businesses is that digitalization is the way to go. The financial sector remained strong in the covid 19 crippled operating environment thanks to the adaptation of electronic banking channels. In the Zimbabwe financial sector non-funded income became a key driver for bank earnings before the outbreak of covid in a bid to alleviate the negative impact of cash shortages as well as reduce face to face interactions in light of COVID-19, banks adjusted by promoting the use of e-channels for payments.
Nedbank also reviewed that it acquired market share and had the second most ZimSwitch POS transactions in 2020. The growth was credited to the increase in client base and accounts, high digital platform transactions volumes and increased points of sale (POS) machines. Nedbank’s digital platforms include internet banking, mobile banking and the Nedbank Mobile App.
Banks in globally including Nedbank have made more investments in digital platforms such as its reloaded zero data-enhanced mobile app, POS machines and Chatbots to enhance communication with customers.
“We made strides with our fintech partners in enhancing delivery channels for our products and services. Digital enhancements increased mobile banking and online internet banking capability, adding multi-currencies, online onboarding of new accounts, transfers to mobile wallets, bulk payments and remote issuance of debit cards. The last quarter was spent refreshing the Nedbank mobile banking APP look and feel and adding new features. Corporate and institutional clients benefited from self-service online platform administration, bulk account opening and application programming interface (API) integration for real time bulk collections and payments”. DR Sibongilo Moyo, Managing director at Nedbank.
Remote branches, online and USSD account opening platforms played a big part in the acquiring of new clients during the hard times of novel coronavirus pandemic containment measures.