ZIMBABWE’S largest financial services group by assets and deposits, CBZ Holdings Limited, saw its profit after tax for the year-ended December 31, 2016 decline 32 percent to $23,8 million from $35,2 million achieved in the prior year.
Group revenue for the period amounted to $158,98 million representing a 12,7 percent decline from prior year’s $182,25 million.
In his presentation, group chief executive Mr Never Nyemudzo indicated the business was hamstrung by cash and foreign currency shortages, constrained credit expansion, balance sheet recession, formalisation of the economy and reduction in interest rates.
However, the group initiated cost containment measures that resulted in total expenditure falling 6 percent.
These were achieved through review of supplier contracts and improved processes efficiencies and Mr Nyemudzo highlighted the group will put more efforts to reorient, reduce and optimise costs with a target cost to income ratio of 55 percent to 60 percent.
Of the group’s total revenue, the banking unit contributed $118 million as deposits
grew 6 percent to $1,7 billion from $1,6 billion in 2015.
According to the 2017 Monetary Policy Statement, total banking sector deposits increased by 6,1 percent from $6,14 billion as at September 30, 2016 to $6,51 billion as at December 31, 2016.
The banking unit posted a profit after tax of $18,7 million, a 28 percent decline from $26 million reported in 2015.
CBZ Life contributed $2,6 million to after tax profit and $6,2 million to revenue. CBZ Asset Management’s profit halved to $0,1 million while its total income was unchanged at $2,1 million.
CBZ insurance profit declined 18 percent to $0,9 million with its revenue flat at $3,4 million.
However, total group assets increased 6 percent to $2,08 billion from $1,97 billion on the back of increase in Treasury Bills.
Non-performing loans marginally improved to 6,6 percent from 6,9 percent last year, but ahead of the sector average ratio of 7,87 percent as at December 31, 2016.
At 26 billion transactions in 2016, CBZ accounted for 35 percent of the national transactions and 13 percent of the banked population, holding 367 000 active accounts.
Loans and advances were at $1,01 billion, which is 27 percent of the industry’s total advances.