Nedbank had second highest ZimSwitch transactions in 2020

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.