The NMB Bank Treasury manages NMB Bank's exposure to interest rate and foreign exchange risk. This department accepts and places deposits on the inter-bank market on behalf of clients or for the bank's own account. These will be call, demand and time deposits. It is also involved in the following:

• Accepting and discounting bankers acceptances.

• Trading in securities e.g. bills and stocks.

• Advice on money market matters.

• Issuing of negotiable certificates of deposit.

The Treasury Department also engages in spot and occasionally in forward exchange transactions in foreign currencies where these are supported by an underlying trade transaction. The department is also responsible for marketing its products and performing the account relationship function for deposits, both large institutional depositors and high net worth individuals.

Money Market Investments

Experienced personnel who can advise on investment options man the NMB Bank Treasury. The department offers both local money market and foreign exchange dealing and is able to offer very competitive rates for a wide range of services. Investment in the local money market obviates the risks associated with the stock market as an indicative rate is quoted to the client. The rate varies with the size of deposit as well as the length of time of the investment. If Treasury Bills or fixed deposits are the investment of choice, the rate quoted at the time of investment is guaranteed and is not subject to fluctuations in market rates.

The following instruments are the commonly used money market investment options:

Call Accounts

This is an investment and demand deposit account for an indefinite period, which may be withdrawn on demand. In Call Accounts funds are invested at a floating rate of interest calculated on a daily basis and paid monthly. The interest rate will change depending on the general liquidity of the market and the prevailing money market rates. The advantages of this product are:

• Automatic transfers thus avoiding accidental overdrafts.

• Provides security and can be pledged as security for any borrowings.

• Funds can be withdrawn without prior notice therefore the product is ideal when there is a likelihood of a cash outflow in the near future or if the date of outflow is uncertain.

• Competitive interest rates.

• Rates on call deposits are reviewed periodically in line with prevailing money market conditions.

• Clients may be contacted and advised in the event of significant rate movements.

Fixed Deposits

This is a high interest bearing investment account where a fixed sum of money is invested at a fixed interest rate, for fixed period (tenor). The tenor is entirely at the discretion of the investor. The advantage of a fixed deposit is that adverse interest rate movements do not affect the agreed return at deal date. However, the reverse is true if interest rates move upwards.

• Deposit has to be maintained for the duration of the fixed deposit i.e. 30, 60, 90 or 180 days.

• Can be used as collateral security on overdrafts/ loans

• Can be re-invested without loss of interest

• Interest can be transferred to some other account upon maturity

• Any early redemption of the fixed deposit attracts a charge

• Fixed deposits have a higher return on investment than transactional accounts.

Bankers Acceptances (BA's)

These are negotiable instruments accepted and guaranteed by NMB Bank or other institutions with specific future maturity dates. Banker's acceptances are traded on a discount or yield basis and offer protection against interest rate fluctuations during the investment period. Risk on investment is with the accepting bank.

Treasury Bills

Investments can be made in these gilt edged securities issued by the Central Bank and guaranteed by the Government. These are freely discountable instruments in the secondary market. Interest rates are market related and investors are guaranteed security on their savings.

Forex Market

Spot Dealing

This involves the buying and selling of all major currencies in their various forms. These must be delivered within a period of time not exceeding two business days. NMB Bank provides competitive quotes for the various currencies. Minimum transactional amount is 1000 units per currency.

Foreign Currency Accounts

They are 100% convertible deposits in major foreign currencies, which enables residents or non-residents to retain their foreign currency while opening opportunities to participate on the forex and local money market subject to Exchange control regulations. Corporate bodies can use this facility but subject to Exchange Control Regulations. Minimum amount 1000 units per currency.

Other Products

The following are further money market products and services offered by NMB Bank Limited.

• Accepting and discounting Banker's Acceptances

• Provision of short term and long term loans

• Overdraft facilities

• Issuing of Guarantees

• Advice on Money market matters and investments

• Negotiable certificate of deposit (NCDs)

• Short term bridging finance to facilitate imports and exports

• Forward rate agreements and any other tailor made products to suit client requirements

Eligibility

• Companies and individuals are eligible

• Individuals must be above 18 years of age

Norah Ndlovu, NMB Bank Treasury

Tel: (263-4) 759652-9

Cell: 263-11 616 109  or 263-912 417 146

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