Increased banking fees, commissions drive ZB Holdings’ revenue

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Tinashe Makichi and Livingstone Marufu

HARARE – ZB Holdings Limited posted a 10 percent increase in revenue to $32,5 million for the five months to May 2018 from $29,5 million of the comparative period driven by increased banking fees and commissions. The fees and commissions were mainly driven by new client acquisitions and transactions.

Other income for the financial services firm also increased 72 percent as a result of increased flow in advisory and fund raising mandates.

The group’s net profit for the period under review stood at $6,2 million compared to $6,1 million of the prior period. Operating profit increased to $10,2 million from $9,2 million in 2017, representing an 11 percent improvement.

“The operating environment has remained difficult. However business confidence has increased as a result of the economic policies that Government has introduced since the advent of the new dispensation,” said ZBHL chief executive Ronald Mutandagayi.

Gross interest income for the financial group for the period fell one percent to $10,4 million from $10,5 million in 2017. This was due to lower portfolio earning rates as well as constrained growth in the loan book.

On the other hand, Mutandagayi said softening of interest rates on the market in sympathy with the increased liquidity situation resulted in interest expense falling by six percent to $2,94 million compared to $3,13 million in 2017.

As a consequence, net interest income increased marginally by one percent to $7,5 million in 2018 compared to $7,4 million in 2017.

Operating expenditure for the group increased by 10 percent to $22,3 million from $20,4 million in sympathy with general price movements. The increase was attributed to expansion in computer, information technology and communication costs.

Despite the above increase, the cost to income ratio improved marginally to close at 69 percent for the period compared to 70 percent in 2017.

Mutandagayi said cost reduction measures will be reinforced in the second half of the year to maintain the cost to income ratio below 70 percent for the full year.

The group’s total assets stood at $550,6 million during the period under review having increased by six percent since December 31, 2017.

Total earnings assets constituted 75 percent of total assets with Treasury Bills (TB) having remained the asset of choice in an environment with limited alternative investments. The portfolio for TB’s however increased by 23 percent to close the period at $192,3 million.

Deposits for the group increased six percent over the same period to $367,7 million from $347,1 million as at December 31, 2017.

Gross loans reduced by 11 percent to $114,3million during the period from $128,3 million. Un-utilised facilities were above $40 million as uptake of credit facilities remained slow due to macro level factors.

On major strategic developments, Mutandagayi said the group has been able to mobilise a total of $30 million in credit lines with region banking partners of which $10 million is now a drawdown stage while the balance of $20 million is at finalisation stage.

Following the successful mobilization of $105 million under the Emergency Road Rehabilitation Fund for the Zimbabwe National Roads Authority in 2017, the group has returned to raise a further $150 million.