Zimbabwe’s largest financial services provider, CBZ Holdings’ profit for the 12 months to December 2019 plunged 30% to ZWL$312.5m from ZWL$448.3m in prior year, partly due to lower interest income and prolonged economic volatility.
The heightened pressure of the financial services sector saw CBZ’s interest
income declining 32% to ZWL$537.8m during the reviewed period from
ZWL$795.4m in the previous year.
CBZ Holdings, which operates CBZ Bank and Building Society, CBZ Life,
CBZ Insurance, and Datvest, also posted ZWL$521m monetary loss during the period under review.
The group’s operating expenditure surged to ZWL$1.09bn from
ZWL$739.5m in the prior year.
Its non-interest income, supported by banking fee income, investment income which remained the major contributor of the group’s noninterest income, however, grew 83% to ZWL$2.3bn from ZWL$1.2bn in 2018.
Income grew 89% to ZWL$883.6m from ZWL$467.3m.
The group’s non-interest income to total income grew to 83.4% during the period under review from 54.2% in 2018.
Cost to income ratio stood at 40.1% from 59.7% while return on assets was 5.3% during the reviewed period from 3.6% in prior year.
Total assets stood at ZWL$17.8bn from ZWL$15.2bn. Total liabilities went up to ZWL$15.01bn from ZWL$13.3bn.
Total deposits grew to ZWL$13.065bn from ZWL$12.9bn in 2019.
Loan book grew to ZWL$3.29bn from ZWL$3.719bn.
Loans to the agriculture sector stood at ZWL$2.27bn, followed by distribution at ZWL$307m.
The mining sector received ZWL$123.5m while the private sector got ZWL$183.8m. Loans to manufacturing, Services and construction stood at ZWL$133m, ZWL$239.7m and 8.2m respectively.
CBZ bank’s profit fell to ZWL$216.5m during the period under review while
CBZ Life reported a loss of ZWL$37.7m from a profit of ZWL$27.2m. CBZ Insurance reported a loss of ZWL$26.4m from a profit of ZWL$3.5m.
Datvest reported a loss of ZWL$2.7m from a profit of ZWL$7.8m.
The group held foreign c u r r e n c y – d e n o m i n a t e d legacy liabilities and nostro gap accounts amounting to US$451 551 474.
These debts relate to liabilities denominated in US dollars. The liabilities were translated to the functional currency at the closing rate in line with IAS 21.
During the period under review, amounts totalling US$10,745,225 were settled through this arrangement while payments totalling US$220,000 have been made subsequent to year end.
But, at year end, the group was not able to reasonably estimate the timing and amount of the cash flows associated with the government grant receivable.
The Group has considered whether the grant receivable is impaired at year end and concluded that no impairment should be applied to the asset’s