Buoyant CBZ to focus on SMEs

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CBZ Holdings will focus on small and medium enterprises (SMEs) in 2013 aiming to grow its funding for the sector from the current 5 to 15% by year end, group CE John Mangudya said.

Report by Clive Mphambela

Presenting the group’s full-year results to December 31 2012 this week, Mangudya said SMEs were going to be a major focus area for the bank.

“CBZ will move to grow on the microfinance and SMEs not only because it is good to do, but there is less concentration risk in the SME sector,” Mangudya said. He said the bank would increase its support for SMEs as they have a greater impact on the economy through potential to create more jobs.

CBZ Holdings’ net profit for the year doubled to US$45 million as the diversified financial services group continued to consolidate its market dominance as Zimbabwe’s largest bank by assets, deposits, capitalisation and profitability.

The group’s total income for the period under review surged 17% from US$123,1 million to US$144,1 million spurred mainly by 14% growth in the banking division income. CBZ bank raked in US$136,7 million in 2012, up from US$120,2 million earned in 2011.

The bank led the group’s overall performance, contributing US$42,3 million of the total US$45 million in profit after tax. The insurance divisions, CBZ Life and CBZ Insurance, contributed US$1,5 million and US$200 000 respectively to the bottom line while the asset management unit, Datvest, remained the fly in the ointment, chalking up a loss of US$150 000.

The bank continued to defy economic odds, adding US$203 million in deposits to take its deposit base to US$1,0324 billion , a 24,4% jump from the US$829,9 million deposits which sat on its balance sheet at the end of 2011.

The bank’s total assets surged 14,5% in tandem with US$1,249 billion from US$1,091 billion at the end of 2011.

Mangudya said a key strategic development during the year was the successful share buyback scheme under which the bank successfully bought back 10% of its own equity as approved by the shareholders at the last annual general meeting.

Explaining the profitability trends, finance director Never Nyemudzo said the group was benefitting from the increase in offshore lines of credit, which now constitute 27% of deposits up from 20% share in 2011. He said the longer profile of the funding would enable the bank to extend better credit tenures to its customers.

Non-interest income, he said, an important component of income, contributed 32% while net interest income was 68% of revenues in the review year.

“This year it is going to be a game of volumes rather than increases in charges. We have already entered into a memorandum of understanding with the RBZ, and we intend to be very compliant with it,” Nyemudzo said. CBZ Bank’s loans and advances were 70% of assets down from 76% last year, reflecting the bank’s drive to add liquidity to its balance sheet, while the bank’s other key indicators were sound.

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