News Column

CBZ Net Profit Drops 20 Percent

August 7, 2014

The country's largest bank, CBZ Holdings says it remains on solid ground in spite of the 20 percent drop in profitability for the half year to June.

The group posted a net profit of $12,8 million from $16 million the comparative period last year but chief executive Mr Never Nyemudzo is optimistic of a better showing in the second half.

The banking group's total income rose just one percent to $69,6 million from $69,2 million the same period last year.

Mr Nyemudzo said the bank remains "firm".

"CBZ and its subsidiaries remain firm in terms of capitalisation.

The bank had $100 million in terms of core capital against the $25 million that is required by the Reserve Bank of Zimbabwe," said Mr Nyemudzo.

Asset management has four times capital cover, the CBZ Life $7 million compared to $2 million, the short-term insurance at $1,7 million compared to $1,5 million.

"This gives us more room to be able to underwrite more business and also withstand any unplanned shocks," he said.

The group reported that Non-Performing Loans have risen to 6,1 percent from 4,4 percent in December last year.

NPLs are expected to be not more than eight percent by year end.

"We are enhancing our collection efforts especially on failed relationships," said Mr Nyemudzo.

Some of the new projects introduced include the medical aid cover, the Smartmoney mobile money service and land development.

CBZ is developing 1095 stands in Nehosho Gweru, 284 in Chikanga Mutare and about 400 stands in Kwekwe.

"We are largely funding this from a line of credit from ShelterAfrique. The stages of completion are encouraging with the Nehosho project expected to start selling before the end of the month. We are expecting completion of the servicing before end of September and parallel construction of the units should also start soon," said Mr Nyemudzo.

The houses cost $213 per month over a ten- year period for a two-roomed unit at 15 percent interest rate, $276 per month for the three-roomed and $337 for the four-roomed house per month.

"We are sitting at about $230 million from a number of development partners that we have. Once we have concluded our $200 million bond from the Afreximbank we expect to take that to $430 million," said Mr Nyemudzo.

CBZ Global fund has been set up in Mauritius and the group's executives were in Mauritius last week to finalise the paperwork for the new initiatives.

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Source: AllAfrica

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