HomeBusiness DigestCBZ warns of slower income growth

‘AG’s office must be free from political interference’

Financial Director Never Nyemudzo told analysts in the capital on Tuesday that the group was forecasting a 10% growth in the top-line and a 32% increase in total assets this year. 

Total income grew 50,9% in the year to December to US$123,1 million in spite of the liquidity crisis.

The liquidity crunch was mainly caused by high value payments by significant clients due to the expenditure associated with year end. However, mitigation strategies were put in place to ensure the situation is contained and never repeated.

New lines of credit amounting to US$120 million had been sourced. CBZ Holdings incoming CEO John Mangudya said the group’s facility from the PTA bank will be increased to US$60 million while there will also be a US$23 million facility for fuel. The Diaspora Bond will be increased while there was the US$7,5 million from Shelter Afrique for mortgage financing and the US$83 million general facility from Afreximbank.

Mangudya said the group would seek more credit lines, especially for micro and small-to-medium enterprises and increase the tenor on mortgage lending.

To alleviate liquidity challenges, government staggered salaries payment dates for its employees.  Mangudya said the bank would do things differently this year and not lend as much as it used to. The bank is forecasting a modest 5% increase in loans this year.
In the year to December, the group reported a 61,2% growth in net profit to US$30,3 million.  Earnings were US$4,83 cents a share.

The group declared a dividend of US0,13 cents, bringing the total annual dividend to US0,25c with a dividend cover of 17,7 times. 

CBZ Bank contributed the bulk of the earnings with total income of US$105,8 million. Operating expenditure had risen 42,8% leading to a bottom-line of US$24,7 million.

A constant 4% return on assets and return on equity, which increased from 22% to 25% has good news to investors. Total equity increased by 37% and assets gained by 54% compared to 2010 to close at a balance sheet position of US$1,06 billion.

Total advances were US$790,3 million, up 77,8% from US$444,6 million and total deposits were up 43,5% to US$829, 9 million. A security value of US$867 million had been made on the advances, which was mainly made up of the mortgage bond at 63,4%. Security cover was at 1,1 times while the group had made provisions of US$21,7 million, which Nyemudzo said was prudent as the bank moves towards adoption of Basel II.

Non-performing loans were at US$48 million, with the coverage ratio of 1,2 times. The average tenure of loans was at 18 months.
Agriculture made the bulk of the advances at 29%, followed by distribution at 22% manufacturing at 14%, services at 13% and private lending at 11%. Government related loans were at 0,2%. 

Deposits were mainly made up of services at 21%, financial organisations at 20% private and distribution each at 14% and manufacturing at 13%.  The group expects deposits to grow by 48% this year. Loans to deposit ratio was now in the 80% range.

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