The Sunday Mail
MARKET watchers expect the share price of bank stocks to rebound during the course of the year after the Reserve Bank of Zimbabwe’s initiative to mop up toxic debts from the sector positively impacted on profits.
By February this year, the Zimbabwe Asset Management Company (Zamco), a unit of the central bank, had acquired non-performing loans worth US$357 million.
Overall banking sector revenues rose 9,7 percent in 2015 while total deposits grew 10,7 percent to US$2,7 billion in the period.
Stockbrokers EFE Securities forecasts that ZB Financial Holdings’ stock will rise 300 percent to USc12 by year-end.
While the bank holds the highest ratio of bad loans in the sector at 20 percent, it reported a remarkable turnaround in 2015 as earnings rose to US$9 million from a loss of US$9,8 million a year earlier.
ZB Financial Holdings is currently trading around USc3, up 20 percent since January.
CBZ Holdings Ltd shares are expected to rise 41 percent to USc15,5. Only 6,9 percent of the group’s loans were non–performing last year.
“CBZH’s huge loan book and level of provisioning on same remains a sticking point on its value though its expanse which makes it a leader in the cluster and indeed the sector should fortify and enable it to weather any storms,” said EFE Securities.
CBZ Holdings Ltd, which last year reported 123 percent and 6,6 percent growth in net interest income and net profit, respectively, closed at USc11 on Thursday.
Year-to-date, the stock is up just 0,1 percent.
NMB Zimbabwe Ltd shares are projected to rise 18 percent to USc4,49 on improved lending.
“. . . investors can take comfort in the dominance of the lines of credit in their (NMBZ) deposits,” added EFE.
The bank reported net profit soared 243 percent to US$5,5 million last year after loans rose 12 percent to US$243 million.
NMBZ’s non-performing loans stood at 13,8 percent at the end of 2015, down from 17,4 percent a year earlier. Zamco has taken over more than US$1 million of the bank’s bad loans.
Analysts are, however, less optimistic about FBC Holdings Ltd and Barclays Bank of Zimbabwe.
Barclays is predicted to slump to USc2 from USc2,70; while FBCH’s share price is expected to slide to USc5 from USc6,60.
Banks have been struggling to generate more revenues in an environment where revised minimum capital requirements pushed up the cost of doing business.
