After experiencing a serious setback in 2013/14 financial results the National Development Bank (NDB) vows to cut its losses significantly going forward. Updating the media on their current business environment the CEO of NDB Lorato Morapedi said an interest constrained environment, high cost of funding immensely affects the bank’s profitability.
She said despite all these challenges the bank intends to break through the ceiling and shrink the bank’s 2013/14 comprehensive loss by at least 50% during the year 2014/15 to ensure that the NDB tracks back to profitability. The banking industry has been experiencing tight liquidity but despite that NDB remains to be self-sustainable and continues borrowing from the capital market which is still under a constrained interest rates environment.
Morapedi said the Bank is lined up for the privatisation exercise under the Government Privatisation Master Plan and has already appointed a commercialisation consultant who is in the processes of developing a new business model and will assist in the application of a banking license. “We expect that when the new business model has been completed and approved at relevant governance structures this will deal with most of the Bank’s woes,” said NDB CEO.
Having experienced a significantly high level of Non-performing loans the Bank at the beginning of financial year 2015/16 embarked on a vigorous collections campaign to reduce its NPL by 80% in order to drive the Bank back to profitability, said Morapedi. The optimistic NDB boss said while they are targeting to cut their comprehensive loss by at least 50% auditors are still at work to ensure that the current audit is complete but noted that people should be aware that the 2013/14 external audit took a bit of time to complete thus having a sequential effect on the 2014/15 which then started late.
“This late start will subsequently delay completion of the audit but we are expecting for everything to be complete by end of third quarter,” Morapedi said. She said that they will also continue to contribute to give back to the community as evidenced by the bank’s investment in various sectors like; Women empowerment, poverty eradication, sports.