Zimbabwe’s largest financial services provider, CBZ Holdings has called for the authorities to introduce mitigatory measures against external shocks as they are affecting the viability of companies while also posing risks to the economy.
In a trading update, CBZ company secretary Rumbidzai Jakanani said the group’s profit shrunk by 67% to ZWL$929m from ZWL$2.86bn attained in the prior period owing to the difficult operating environment.
Jakanani said the company is expecting geopolitical tensions to continue hence the authorities are anticipated to cushion the market against rising global inflation emanating from the Eastern Europe war.
She said rising global geopolitical tensions are expected to continue exerting both upside and downside risks to the economy. In particular, mining and other export-oriented sectors are likely to benefit from firming commodity and food prices on the global markets, Jakanani said.
“However, rising prices for oil, fertilisers, and other critical imported raw materials, will translate into higher domestic production costs, thereby adversely impacting on competitiveness and viability. Measures that limit the adverse impact of the external shocks, should therefore be prioritised,” Jakanani said, adding the “group will continue to monitor the above mentioned macroeconomic developments with a view to better manage emerging risks and opportunities”.
The World Trade Organisation said Russia’s invasion of Ukraine was going to damage global trade, with low-income countries like Zimbabwe the most affected.
In Zimbabwe, inflationary pressures are fuelled by rising global oil prices(external shocks) as well as currency weaknesses.
As a result, annual inflation soared to 131% in May 2022 up from 96.7% posted in April, as the local currency value continued to tumble against the greenback.
During the reported period the ZWL$ depreciated by 31,06% to end the quarter at ZWL$142,42 against the United States dollar, down from ZWL$108,66 at the start of the period.
The inflationary pressures in the reported period constrained demand and consumption, as central banks tightened monetary policies while economic agents reprioritised expenditures and shifted investment behaviours.
In its trading for the quarter ended March 31, CBZ revenue grew by 53% to ZWL$13bn from ZWL$8.5bn recorded in the prior comparable quarter while their total assets were up 20 % to ZWL$241bn from ZWL$199bn.
In the reported period the group recorded an increase in its transactional volumes and strengthened its balance sheet as a result of the resumption of economic and business activity on a large scale.
In the outlook, the group continues to leverage on its investment in technology, human capital to deliver tailor made service and solutions to uphold its promise to offer convenience and satisfaction to its wide range of customers even in Covid-19 restricted business spheres, Jakanani said.