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Nelson Gahadza Senior Business Reporter

CBZ Holdings says its performance in 2021 exceeded expectations, giving a peek into its growth prospects, but also affirmed a highly successful digital transformation.

Group chairman, Mr Marc Holtzman during a virtual media briefing said the digital transformation strategy had a huge impact on the group’s ability to save customers in a positive way.

“I am particularly delighted that the performance is indicative of the future strategy but also an affirmation that our highly successful conversion to our digital transformation strategy has a huge impact on our ability to save our customers in a very positive way,” he said.

During the year ended December 31, 2021, CBZ Holdings total income increased to $42,5 billion compared to $23,5 billion in 2020 largely driven by significant growth in interest income.

The group’s interest income for the period grew to $21,8 billion from $8,1 billion in the prior year with the growth attributed to growth in interest from loans to $14,8 billion from $2,9 billion in 2020.

During the year under review, non-interest income at $23 billion was the largest contributor to total income having grown from $17 billion in the same period in 2020.

Commission and fee income at $9,2 billion was the largest contributor to total non-interest income followed by agro-business income of $4,5 billion and unrealised profit on foreign currency exchange of $4,1 billion.

The group’s deposits for the period grew to $131 billion from $104 billion in 2020. Loans and advances also increased to $55 billion from $47 billion in prior year.

Customers in the services sector made up the majority of the deposits at 54 percent, followed by the distribution sector with 12 percent and private customers with 10 percent.

“When you combine all those results, you can also see that our USD deposits at 62 percent from nearly 3 percent 3 years ago, shows that customers are adapting to the challenging domestic environment and despite that are thriving,” he said.

Mr Holtzman said the group’s Agro Yield subsidiary did a magnificent job in 2021 and played in no small part targeted lending to the agricultural sector, which saw Zimbabwe for the first time becoming a net exporter of maize and wheat.

“As a result, we will continue to transform our lending to become effective,” he said. CBZ Holdings chief finance officer Tawanda Gumbo said the recovery rate on agro-yields had always been a moving target because the funding was extended in different seasons.

He said the subsidiary supports wheat, sorghum and maize and each program runs through different yield curves, with different processing over time.

“In 2021, that trend has been improving so in terms of wheat, we had a recovery rate of 73 percent recovery rate and the maize program 65 percent,” he said.

Mr Gumbo noted that the group is scaling up the agricultural value chain financing with key priority in the horticulture sector.

On insurance, Mr Holtzman said the group will continue with the acquisition transaction of First Mutual Holdings (FML) which will create a critical mass factor which will allow the group to perform and achieve even more positive results.

He said the group was satisfied with the performance of itsRed Sphere Finance microfinance lending unit, which was not only profitable but effective in  a sectorsupporting that has been previously underserved.

“It also shows that the institution is creating the platform and products from our bank subsidiary with the introduction of indices which have become popular in the market through our commercial bank which is continuing to innovate and achieve and break new milestones on record,” he said.

Mr Blessing Mudavanhu, the group’s chief executive noted that as we entered 2021, Covid-19 pandemic was also picking up.

“So we are happy to say that the adjustments that we made on our digital delivery platforms nearly spared us with clean numbers for 2021.

“The period was difficult but we had to adapt to new ways of working where when we started the year, almost 100 percent working from home,” he said.

According to Mr Holtzman, the Covid-19 pandemic helped the group to accelerate the transformation strategy.

“We are evolving into a technology company, to say in the coming years, we are a tech company, with a banking license.

“In the future, 9 out 10 banks here today will be offering utilities. Therefore, we want CBZ to continue to be a market leader in terms of the transformation,” he said.

Mr Holtzman said in 2022, global economies were likely to start the gradual transition towards co-existing with Covid-19, implying reduced disruptions and hopefully improved business activity.

However, he said, the major downside risks include the possibility of extended supply chain disruptions, rising global inflationary pressures as well as disparate monetary and fiscal policies as countries transition to the next normal at different levels and scales.

He noted that the shift towards environmental accountability is expected to gather pace in 2022, hence the Group’s ongoing efforts to embed Environmental, Social and Governance “ESG” practices and goals in operations.