ZB Holdings net profit for the half year to June rose 38% to US$8,2 million from US$5,9m in the comparative period in H116 helped by improved revenue performance. The group’s performance was also boosted by enhanced dividend accruals on investments, increased transaction volumes and improved net insurance premium outturn.
Net revenue increased by 17% from US$29,4 million in 2016 to US$34,5 million during the period under review.
“Net interest income increased by 13% to US$9,2 million whilst interest rates generally softened as financial intermediaries maintained long positions whilst rate ceilings on credit facilities were further reduced by the Reserve Bank of Zimbabwe in the second quarter,” the group said in a statement attached to its results.
The group said revenues were powered by contributions of a substantial Treasury Bills portfolio transacted in prior years at bargain discount levels as well as the improved quality of the underlying credit book.
“A net charge of US$1,3 million was posted in respect of the lending book against a net recovery of US$2,0m in 2016 as loan recovery remains a focal area,” the group said.
Net insurance premiums amounted to US$4,9 million against US$4,3 million in the comparative period in FY16. Gross premiums increased by 4% whilst a better claims experience resulted in related expenses reducing by 1%.
“A fair value credit of US$1,6 million (2016 – loss of US$10,9k) was posted as underlying investments performed positively during the period,” the group said.
“Operating expenses increased by 10% from US$21,8 million to US$23,9 million, driven by business acquisition costs and an increase in technology related costs as the usage of electronic platforms became more pervasive. Depreciation and amortisation charges remained flat at US$2,7m.”
The cost efficiency ratio improved to 69% compared to 74% in FY16, the group said.
Total assets value reduced by 2% to close at US$430,8 million.
Total deposits reduced by 6% from US$275,3m as at December 31 2016 to US$259,8 million as at June 30 2017. “Deposits however remained transient and thus not suited for the creation of long dated assets,” the group added.
“Net advances decreased marginally as facility utilisation by borrowing clients remained low. Gross advances however increased by 6% on account of unfunded guarantee drawdowns. The aggregate liquidity ratio was maintained at more than 70% throughout the period.”