Good times as CBZ brings back the cash

WITH a balance sheet of US$265 million, the biggest for any financial institution on the Zimbabwe Stock Exchange, CBZ Holdings could not have chosen a better theme for their 2009 operating period than “Bringing back confidence”.


The “good times” at CBZH were written all over the faces of group chief executive Nyasha Makuvuse, managing director John Mangudya, chairman Richard Wilde and finance director Never Nyemudzo before they presented the results.
They were relaxed and confident and no analyst, shareholder or journalist during the briefing could take them to task on the group’s figures and operations. Investors quick to read in between the lines were sure of the immense potential the group had against competition in a recovering economic environment.
They voted with their wallets and the counter has been on an upward trend since then.
The group’s key focus for the year under the theme “Bringing back confidence” are strength and stability as measured by capital, deposits, mortgage, funds under management and balance sheet.
During the period under review, the group’s total income was US$14,4 million. Profit before tax was US$5,4 million while after tax it stood at US$4,3 million.
“This was achieved by the group’s ability to generate income and increased financial intermediation,” Nyemudzo told businessdigest yesterday.
Each of the group’s regulated units has in excess of 350% of capital that is required by the end of this month by the Reserve Bank.
As of June 30, the CBZ Bank which is the group’s flagship was sitting on US$22, 8 million, way above the regulatory minimum of US$6,25 million. The building society’s capital was US$18,8 million, US$13,8 million more than what the Reserve Bank requires.
Asset management companies are required to have US$250 000 on their balance sheet, but CBZ asset managers already have US$1,2 million.
The commercial bank’s total income was US$11,1 million. Profit after tax stood at US$3,3 million.
The bank has maintained pole position on deposits with 33,4% of the market share, while advances are 23,8% of the market share.
During the presentation of the results Makuvise said: “This positive performance has been attained in an environment where margins have been squeezed, operating costs have increased and economic activity is still constrained”.
The building society’s total income was US$1,2 million while the profit after tax was US$100 000. CBZ asset management’s total income was US$1,1 million while the profit after tax stood at US$400 000.
The group’s net interest income was 23%, while non-interest income was 77%.  Nyemudzo attributed the bulk of the breakdown to “commission and fees income largely driven by structured transactions”.
Of the US$265 million on the group’s balance sheet, 42% is cash — liquid balance sheet to cater for customer needs.
“A strong loan book at 33% is a reflection of the desire by the group to resuscitate the economy. It is supported by strong investment in properties at 21%,” said Nyemudzo.
Of the group’s total deposits as at June 30 of US$186,2 million, compared to US463, 7 million as at December 31 2008, 81% was funded locally showing “positive rewards of the lending strategy”.
“A 19% offshore funding growth from the 14% last year increased confidence by the international financiers in the group,” he said.
The banks’ loan to deposit ratio was 35% during the period under review. The group said these ratios compares favourably with similar groups in the region and would improve as confidence levels from the banking public improves.
Going forward, the chairman Wilde said management believed the political and economic stability that is emanating from the formation of the inclusive government and the multi-currency
system will continue to have a positive impact on the industrial sector resulting in improved production.
“It is imperative that the country builds on the positive economic policy responses and continue to improve the investment climate to attract positive net investment into all sectors of the economy and most notably in infrastructure development,” Wilde said.

 

Paul Nyakazeya