Global rates chokehold on Zim economy to worsen: Bank

BUSINESS REPORTER

CBZ Holdings Limited, a publicly traded financial services group, says it anticipates global interest rates to remain elevated in the second half of this year, a situation which will chokehold Zimbabwe’s economy as it will be difficult  for local banks  and businesses to secure offshore funding  due to high cost of borrowing.

Group Chief Governance Officer Rumbidzayi Jakanani said in a trading update for the quarter ending March 31, 2024, that this would undoubtedly continue to drive up the cost of borrowing money abroad.

Jakanani asserts that the country requires long term  financing in order to achieve sustainable  economic growth.

“Global interest rates are expected to remain elevated, thereby perpetuating the high cost of international capital as well as the strengthening of the United States dollar against other currencies,” Jakanani said.

She continued: “The global and regional markets during the period under review were dominated by interest rate decisions, emerging markets debt distress and restructurings, elections, the El Nino effect and geopolitical tensions.

“On the interest rates front, most central banks maintained their benchmark interest rates at multi-year high levels, citing lingering inflationary pressures and persistent uncertainties due to rising geopolitical tensions.

“The biggest beneficiary of the elevated global interest rates was the United States dollar, which remained largely firm against major currencies.”

CBZ Holdings reported a total revenue of ZWL$2.38 trillion in its financial results for the period under review, demonstrating a respectable financial performance driven by a continued increase in client numbers, deposits, transactional activity, and acceptance of the group’s extensive product range.

With loans and advances to consumers ending the period at ZWL$7.12 trillion, the group’s financial standing remained solid given that its customer deposit base was ZWL$16.99 trillion.

Insurance operations closed with a ZWL$108.64bn insurance liabilities book, supported by ZW$50.09bn in insurance and reinsurance assets.

CBZ closed the period with a strong capital and asset base, coupled with a robust presence in digital channels anchoring the group’s transactional volumes and values.

According to Jakanani, CBZ Holdings continues to use its strong market presence, innovation drive, and customer-centric strategy to preserve its competitive edge.

According to her, all subsidiaries were adequately capitalised during the period under review.

The group, she said, will continue to reconfigure and position its business model towards unlocking long term value for its stakeholders.