ZBFHL cuts 58 jobs to slash spiraling costs
As banking sector struggles to withstand severe economic downturn
BUSINESS REPORTER
ZB Financial Holdings Limited (ZBFHL), a publicly traded financial services group, has trimmed its workforce by 58 employees across the group through voluntary redundancy agreements as part of its cost-cutting strategy, Business Times can report.
It comes as Zimbabwe’s banking industry is struggling to survive a severe economic downturn.
In the past two years, the majority of lenders in the Zimbabwe have taken drastic measures by laying off employees.
In a statement accompanying half year results ended June 30, 2023, ZB CEO, Shepherd Fungura, confirmed the development saying the group adopted a new structure supportive of its strategy which was aligned to the organisational transformation, new business model and organisational design.
“As at June 30, 2023, the group had finalised job evaluation and deployment of staff. As the new group structure settled, the group adopted a voluntary disengagement scheme [VDS] which was taken up by 58 staff members, mostly those who were nearing retirement. The group staff complement as at June 30 2023 stood at 990. Industrial relations remained cordial during the period under review,” Fungura said.
All categories of permanent employees, including executives, senior management, managers, and non-managers, were eligible to participate in ZB’s disengagement scheme, which was introduced in May of this year.
According to Fungura, the global economic downturn and the Covid-19 pandemic, which initially caused the change in the business environment, have had an impact on how the company offers services and value to its clients.
As a result, ZB has changed its business model and supporting systems to better carry out its strategy.
Fungura stated that it will continue to need new skill sets from its staff in order to deliver value in new ways through automation and digital channels.
ZBFHL acting chairman Luxon Zembe said the move was part of cost-containing measures to protect the financial service provider against the economic headwinds.
“The group will also continue to consolidate on one stop shop service centres, as a market differentiator in delivering distinctive quality service to customers. In the short term, prudent investment and cost containment measures will continue to be a priority in order to boost profitability. In the medium to long term, the group continues with its digitalisation journey with more focus on implementing robust and state of the art core banking and life assurance systems in order to enhance efficient product offerings that provide value and convenience to our customers,” Zembe said.
In its financial results for the six months to June 30, 2023, ZB reported a 796% rise in total income to ZWL$917.284bn from ZWL$102.407bn achieved in the prior comparative period.
The income performance was mainly on the back of a 3022% rise in fair value adjustments to ZWL$461.205bn in the period under review from ZWL$14.773bn in the same period in 2022, a 522% improvement in other operating income.
Commission from fees and commisions grew 257% to ZWL$68.10bn in the period under review from ZWL$19.057bn in 2022.
Interest income rose by 115% to ZWL$43.406bn in 2023 from ZWL$20.143bn in 2022 while loan impairment charges fell by 1% to ZWL$11.132bn in 2023 from ZW$11.232bn in 2022.
Resultantly, net income from lending activities improved by 262% to ZW$32.274bn in 2023 from ZWL$8.910bn in 2022.
Operating costs, however, increased by 315% f to ZW$191.725bn in 2023 from ZW$46.170bn in 2022, largely reflecting the effects of inflation.
Profit after tax increased by 2179% to ZWL$678.458bn in the period under review from ZWL$29.771bn achieved in the same period in 2022 .
Total assets for the group increased by 153% in real terms, from ZWL$1.003trn as at December 31 2022 to ZW$2.539trn as at June 30 2023. The growth rate outperformed average inflation over the same period (110%).