CBZ targets revenue growth

CBZ targets revenue growth

Business Reporter
CBZ Holdings is targeting further revenue growth through significant contribution from non funded income to diversify its income base.

CBZ in a presentation of its full year results to December 31 said that the long term goal is however, to sustain an optimal income mix.

“The short to medium term thrust is on revenue growth through non-funded income, while the long term thrust is to sustain an optimal mix,” CBZ said.

The group registered after-tax profit growth of 7 percent to $35,2 million for the year to December 31, 2015 driven by interest income.

For the year under review, non-funded income grew by 13,6 percent with non interest income accounting for 34 percent of total income.

Interest income remains the most dominant after accounting for 59,2 percent of income while underwriting income contributed 6,8 percent.

But interest income may not provide sustainable basis for growth in a market where the regulator capped interest rates at 18 percent.

This is against the backdrop of a market where liquidity is elusive, short term and expensive, as the country uses a basket of currencies.

Looking ahead, the group said that it is also focusing on deriving 20 percent of its profits from the group’s non-banking small business units.

Since 2009, the group’s flagship banking unit has accounted for between 85 percent and 110 percent of the financial group’s profitability.

CBZ said that its 7percent profit growth this year was underpinned by high transactional volumes and widened income streams.

During the period under review, the banking group wrote off $24 million in bad debts.

CBZ loans advanced declined to $1,021 billion during 2015, down from $1,126 billion previously. Last year, the bank wrote off $4,45 million.

For the year ended, the bank’s non-performing loan ratio improved marginally to 6,9 percent from 7,63 percent in the prior year.

This ranks significant above regulatory authorities, RBZ’s benchmark of 10 percent and an industry average of about 13 percent.

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