$3 million loss in 7 months for NBS

NATIONAL Building Society (NBS) slumped to a $3 million loss in its first seven months of operation hurt by initial costs of starting the organisation though it is optimistic of bouncing to profitability by the end of the year.

NBS, a wholly owned subsidiary of public pension fund, the National Social Security Authority (NSSA), opened its doors to the public in May last year.

The institution was set up to provide affordable housing and low cost housing finance. In the seven months ending December last year, the building society recorded a net interest income of $1,1 million, which was, however, overrun by start-up expenses which amounted to $4.4 million.

“Part of the reasons why our costs were high is that it also included the initial start-up costs for operating the organisation,” said NBS chief finance officer, Ethel Chitanda.

“The losses that we had have been going down (on a monthly basis) and we are confident that in 2017 we should be able to start making a return for the shareholder.”

NSSA injected $25 million to get the financial institution running. NBS managing director, Ken Chitando said the institution, which has branches in Harare and Bulawayo, was targeting to spread its wings across the country by opening four more branches in Chinhoyi, Masvingo and Mutare.

It will in the next month launch agent banking operations at the 19 NSSA offices across the country.

“We are also going to come up with retail point of sale machines,” said Chitando, adding the institution was pressing hard to gain a significant market share.

He said the bank had, during the period, managed to mobilise deposits of around $20 million and was targeting to introduce a variety of products to marshal funds that will allow the institution to fund critical housing projects.

Some of the products will be targeting the Zimbabwean diaspora as well as small to medium enterprises. — New Ziana