NSSA’s building society reports $3mln operating loss in first year

NSSA’s building society reports $3mln operating loss in first year

HARARE, March 22 (The Source) – Mortgage lender National Building Society (NBS) registered an operating loss of $2,98 million in its debut year to December 31, 2016 as set-up costs outstripped income, finance director Ethel Chitanda told journalists on Wednesday.

The building society, wholly owned by public pension fund National Social Security Authority (NSSA), opened its doors in May 2016.

“We had operational expenditure starting from January 2016 but we only launched on the 18th of May 2016 to the public, so we have operating expenditure for the full year and additional costs we incurred in trying to set up,” Chitanda said.

“These  contributed to the high operating expenditure that we had. Our revenue started from May to December 2016 when we started to grow customers and interest income.”

Total income reported in the period amounted to $1,42 million while operating expenses were at  $4,4 million. Chitanda added that NBS, which currently operates two branches in Harare and Bulawayo, recorded staff costs of $2 million in the year.

Net interest income was $1,14 million while non-funded income stood at $539,865.

Total Assets stood at $57,06 million, while total borrowing amounted to $15,5 million.

Chitanda said the company has treasury bill holdings worth $7,6 million.

Loans and advances stood at $25,04 million in the period while total deposits amounted to $19,4 million.

NBS had $16,9 million cash and cash equivalents at the close of the year.

Managing director Ken Chitando said the building society will launch agency banking in NSSA outlets across the country.

Chitando also said NBS plans to open four additional branches in Chinhoyi, Gweru, Masvingo and Mutare this year.

Without specifying the amount, Chitando said NBS will issue a bond to raise capital to fund its housing projects, while the lender’s shareholders had already committed a total of $37 million towards the fundraising.

In January, Chitando told The Source that NBS has a target to develop 100,000 housing units worth $1,5 billion over the next five years. NBS plans to construct 10,000 units this year alone. Zimbabwe has an estimated housing deficit of 1.25 million houses.