HomeBusiness DigestCBZ injects US$10m into housing scheme

CBZ injects US$10m into housing scheme

CBZ Holdings has invested US$10,4 million in low-cost housing development in the cities of Gweru and Mutare with plans to extend the scheme to Bulawayo and Kwekwe, an official has said.

Fidelity Mhlanga

CBZ bank CEo Never Nyemudzo told businessdigest last week that despite the effects of the liquidity crisis, the uptake of housing in Gweru’s Senga high-density suburb and Mutare’s Chikanga high-density suburb was reasonable at between 45 and 50% .

“For the Senga project the bank has spent US$8,3 million while US$2,1 million was spent in Chikanga and we are already in discussion with authorities there to acquire more land so that we go into various phases so that our presence in those locations to become permanent,” he said.

Nyemudzo said his bank was working closely with government to acquire more land, adding the cost build-up chain was mainly determined by land acquisition, a significant component in the cost of the end product.

The bank is set to acquire 200 stands to build low-cost houses in Kwekwe, while discussions with Bulawayo city council authorities to purchase land are at an advanced stage. He said the bank has received a US$46 million facility with a three-year tenure at 7% interest per annum from PTA Bank, and will channel US$10 million towards small-to-medium enterprises.

Nyemudzo said although the bank’s rate of non-performing loans was currently pegged at 7,1%, an improvement from 7,39% as at December 2014, CBZ is targeting a further drop to 7% by year-end.

CBZ earned a profit after tax of US$13,7 million in the half-year ended June 30, up from US$12,8 million in the comparable period in 2014 buoyed by an increase in total income.

Total income was up 18,2% to US$82,3 million during the period from US$69,6 million in 2014.

Cost-to-income ratio dropped 63,1% from 66,7% during the same period last year as the group manages its costs.

Total assets increased to US$1,9 billion from US$1,6 billion where total liabilities increased to US$1,7 billion from US$1,4 billion the prior year.

The group said it employed credit mitigation through taking collateral, credit insurance on mortgages over residential, commercial and industrial property, plant and machinery, marketable securities and guarantees.

The company’s share price remained resilient, opening and closing the first half of 2015 unchanged at 10 cents, whilst its market capitalisation remained steady at US$68 million.

CBZ Group Chairman Richard Wilde said it is critical for the country to invest in key economic enablers such as civil infrastructure to ensure the soundness of the financial markets, as well as stimulate aggregate demand and create employment.

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