When a financial institution has been a player in the game banking and finance, it is known as an extant player. In Zambia, few institutions can boast of being in existence for more than 20 or 30 years. But for Zambia’s stalwart housing financial institution, it will mark its 50th anniversary on the 24th of December 2020 following a transition that now sees it as a profitable institution.
When ZNBS celebrates its birthday this month, total assets of the Society would have increased by 30% year on year driven by growth in depositor’s fund sand borrowings. The society has seen revenue operating activities around its mortgage products increase by 22% with significant contribution due to interest from placements with the banks. Their confidence in this can be seen on their balance sheet which shows a 1456% surge in placements with other financial institutions. No doubt the management team are concerned about the time value of money. Many financial institutions found high yielding instruments very attractive in the last two years following the surge in yield rates on treasury bills and government bonds.
However, in the same vein, ZNBS saw increased interest expenses due to new borrowings contracted in a high interest rate environment despite the easing of MPC by the Central Bank. This was exacerbated by strong risk perceptions as the countries credit rating experienced a nose dive.
Despite all this, the Society remained bullish. It was well capitalised during the recently reported financial period with regulatory capital exceeding the minimum capital requirement of 10% of risk weighted assets of K50 million according to their published results.
Under Mildred Mutesa’s leadership, the Society seeks to position itself as a modern institution that addresses the needs to the modern day Zambian customer. They have introduced digital banking, which was traditionally not a mortgage company feature. This is because the Society also provides other traditional retail banking products that some seemingly don’t know about. At 50, this is going to change.
Post 50, the Society will be keen to address the growing housing deficit. In the 50th year, Covid reared its ugly head, distorting many institutions projections. However, this dark swan event does bring with it an opportunity for the management team at ZNBS to shape their next 50 years under the new normal. As multitudes of consumers get displaced from the usual work environments, comes the need for flexible products that will ensure that they will continue to access affordable housing.