Nedbank has released its financial results for the year-end 2020. The bank recorded a total comprehensive income of ZWL$1.1 billion after a poor 2019 where the bank registered ZWL$198 million. However, the more interesting revelation from the financial report was that, according to Nedbank, it had the second most ZimSwitch POS transactions in 2020.
This is interesting because in terms of the number of customers Steward Bank and CBZ probably have a fair chunk of the market. Earlier this year, Steward was said to have 1.9 million customers according to Cassava Smartech’s report. This number makes Steward the largest bank in Zimbabwe if we are to look at the estimated 16 million people in the country.
For Nedbank to say they were able to capture the second highest number had us wondering. We speculated on how this could be possible and we came up with two theories.
The first is that Nedbank has very few POS Machines in relation to its customers. This means that Nedbank customers are more likely to use a POS machine from another bank than one from Nedbank. Which results in ZimSwitch processing more Nedbank cardholder transactions than any other bank. Well… except the bank that finished in first place in 2020.
The second theory is that Nedbank has somehow been able to tap into a very active segment of the market in Zimbabwe. With Nedbank being a well-known brand, and the Group taking over MCBA (Merchant Bank of Central Africa), I can imagine many people would have wanted to give Nedbank’s services a try. More importantly, those people are making a lot of purchases with their cards.
If the latter is the case then Nedbank’s strategy is brilliant and the bank has done really well.
Update: A final theory comes courtesy of “Cde” who in the comments pointed out that OK stores nationwide sport Nedbank’s POS machines. We all know how ubiquitous OK and its subsidiary Bon Marche are. This would mean that it is more to do with POS transactions from other banks than Nedbank card transactions.
It wasn’t all about ZimSwitch transactions
All that ZimSwitch stuff aside, Nedbank had a really good year. On top of the ZWL$1.1 billion, the bank recorded a historic 453% growth in deposits to ZWL$11.3 billion from the ZWL$2 billion recorded in 2019.
Other highlights from the report were:
- Operating income grew to ZWL$3.4 billion outpacing in inflation terms ZWL$2.9 billion in the prior year.
- Reversed 2019 loss to achieve an inflation-adjusted total comprehensive income of ZWL$159 million from ZWL$761 million loss.
- Strong liquidity ratio 108% against 30% prudential limit.
- 29% reduction in the net monetary loss in 2020 from 2019 with balance sheet monetary in nature.
- 62% Interest earning assets to local currency ZWL$ deposits in loans and Government securities.
Digital onboarding
A big feature of the pandemic hit year was remote branches, online and USSD bank account opening platforms. Nedbank wasn’t behind the curve because it already had an online account application platform. But in 2020 it stepped that up by offering the public a way to open an account on the device friendly USSD platform.
“Digital touchpoints and technology investments made over the reporting period present a solid foundation for an agile business poised for growth”.
Dr Sibongile Moyo, Managing Director
Nedbank was also involved in a number of initiatives in 2020. The bank like many others contributed to the fight against COVID as well as youth empowerment through the Youth Accelerator Program (YAP). The bank was also involved in environmental, sustainability and community initiatives.
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7 comments
Valentine if you did your research well you will note that Nedbank is indeed the 2nd highest in terms of zimswitch transactions. This has nothing to do with them having fewer pos machines or their card transactions i believe it is the integrated POS in retail supermarkets. If you walk into OK supermarket at the tills they now use Nedbank the integrated ipos.They switched from CABS because of charges. Every transaction done in OK supermarkets passes through NedBank. By now i think they have integrated with most if not all retail supermarkets and zimswitch integrated pos
I haven’t frequented OK or its chain of stores in a while. But this is definitely a brilliant theory if they have integrated with OK that means it is the same for Bon Marche as well and they are everywhere. Thanks for pointing this out.
zvongonyora zvifana izvi
research ipi yazvoita
Interesting article but I would just like to highlight the following:
1. How much better is the 1.1 billion realised in 2020 than 198 million in 2019? Deeper analysis would reveal there isn’t much difference in real terms because of our currency losing value.
2. You mention that Steward bank is the largest bank in Zimbabwe because it has 1.9m customers out of 16m Zimbabweans. But have considered customers with multiple accounts. Better metrics for measuring bank size are total deposits and total assets and this information is readily available via Google
3. Your hypothesis that nedbank probably was able to have many zimswitch transactions because it appealed to many customers seems to contradict the implied underlying assertion that nedbank had a large proportion of zimswitch transactions yet relatively fewer customers
No harm intended my brother but just pushing for better analysis in these articles
I have a Steward account but I have never used it as well, I think I’m not the only one.
Well done to the bank. However, and this goes for banks in general, they make money from fleecing customers with exorbitant bank charges instead of getting off their rear ends and going to find business like they are supposed to do ie. lending etc…. They make money from cutting back on customer service so that an already POOR service gets poorer.
Very poor research by Muhamba again.