Listed financial services group, ZB Financial Holdings Limited (ZBFHL)’s net profit plunged by 66% in six months to June 30, 2021 to ZWL$785m from ZWL$2.3bn reported in prior comparative period, largely due to negative impacts of Covid-19 and cost pressures.
Total income for the group also declined 30% to ZWL$2.9bn in the period under review from ZWL$4.13bn in the same period in 2020.
“The decline in revenue performance was mainly underpinned by a 67% decrease in fair value credits, from ZWL$1.571bn in 2020 to ZWL$0.519bn in 2021 and an 80% decline in other operating income from ZW$1.706bn in 2020 to ZW$0.336bn in 2021,” group CEO Shepherd Fungura said.
He added: ‘’The restrictive measure introduced by the government to curb the virus had a negative impact on business.”
Fungura said cost pressures remained high during the period under review.
Net interest income, however, rose by 148.6% to ZWL$0.909bn from ZWL$0.366bn in the same period last year.
Banking commissions and fees also rose in real terms by 115.6%, from ZWL$0.533bn in 2020 to ZWL$1.15bn in 2021.
Profits from the banking operations plunged 66% in the period under review as a result of the 72.7% increase in operating expenses from ZWL$976m to ZWL$1.7bn in 2021.
Deposits grew 46% in the period under review to ZWL$12.51bn from ZWL$8.6bn as of December 31, 2020.
Total assets grew 25% in real terms to ZWL$28.7bn from ZWL$22.9bn as of 31 December 2020.
The insurance operation contributed to this growth as ZB Life Assurance saw their total assets grew in real terms from ZWL$3.9bn as of 31 December 2021 to ZWL$4.31 as of 30 June 2021.
Profit also went up from ZWL$90m in 2020 to ZWL$210m as of 30 June 2021. The increase in profit came as a result of the ZB Life Assurance rolling out of products including the funeral service facility.
During the period under review, the group maintained a comfortable liquidity margin of safety which compared favourably against the regulatory benchmark.
In the outlook, ZB remains optimistic. Fungura said ZB would support governments in fast-tracking economic recovery through infrastructure development, he added that focus will also be placed on capital preservation.
“The group will continue to be cautiously optimistic and stand ready to support and partner with the government initiatives to resuscitate the economy, including inter alia infrastructure development, retooling and capacitating the productive sectors and promoting financial inclusion,” Fungura said.
He added: “Focus will also) continue to be placed on the preservation of capital and asset base from value erosion attendant to inflation as well as building digital capacities for customer service delivery in a sustainable and cost-effective manner.”