LIVINGSTONE MARUFU
Listed financial concern ZB Financial Holdings Limited’s total income grew by 548% during the second quarter of 2020 compared to the previous quarter driven by fair value credits and foreign currency exchange gains despite a tough operating environment.
The increase in total income comes at a time the economy has been ravaged by the Covid-19 pandemic which has seen restrictions on movements to contain the spread of the virus.
In a trading update for Q2, ZB chief executive Ron Mutandagayi said the group’s performance was satisfactory despite the adverse environment.
“Total income for second quarter was 548% higher than total revenue earned in the first quarter. Cumulative income for the Q2 was 2 955% up from the total revenue posted in the comparative period,” Mutandagayi said.
Deposits increased by 107% during 2020 half year compared to 2019 full year. Mutandagayi said the core business revenue growth continues to lag behind inflation movements.
Loans and advances grew 164% in H1 compared to FY19 with letters of credit contributing 23% of the total loans and advances. He said the group was able to keep liquidity ratio well above the required threshold to meet its short term commitments in the second quarter.
The aggregated liquidity ratio was above 80% throughout the 2020 second quarter.
Based on the trading activities and balance sheet, ZB does not expect any liquidity constraints in the near future.
Mutandagayi said according to the capital plan submitted to the Reserve Bank of Zimbabwe the bank will be able to reach the revised capital requirements by December 31, 2020.
The group plans to merge building society and bank to strengthen its financial footing. Bank accounts have increased by 9% in the past six months.
ZB has completed the technical processes for the relaunch of Visa International debit card with all regulatory approval granted with Mutandagayi saying the launch is imminent.
He said the diaspora banking product, developed with multiple partners, was in pre-launch stage, having been approved by the regulator in Q2.
Last month, Mutandagayi told Business Times the group would also launch diaspora banking products to generate more forex for the company.
In the outlook, Mutandagayi said the group will seek to review and deepen its internal capacity in preparation for business beyond the current crisis.
He said the economy is expected to remain fragile with Covid-19 ushering in a new social order with widespread implications on the conduct of business.
