Government deposits in CBZ grow

10 Aug, 2014 - 06:08 0 Views
Government deposits in CBZ grow

The Sunday Mail

THE recent transfer of the Exchequer Account from CBZ Bank to the Reserve Bank of Zimbabwe (RBZ) did not dent the financial institution’s health, instead, Government deposit in the lender grew during the first six months of the year.Since 2009,

CBZ has been Government’s banker after the Reserve Bank of Zimbabwe (RBZ), which was saddled by a US$1,3 billion debt, became undercapitalised.

However in March this year, Government closed the account with the country’s largest bank.

At an analyst briefing in Harare last week, CBZ Holdings group chief executive Mr Never Nyemudzo said that the impact of the move by Government was marginal as the group had

“ample time to plan before the move.”He said,

“What’s important is the experience we got from dealing with Government’s trading partners.

“The process has now been completed and we are now operating like any other bank on Government basis, that of being an agent.”

Government’s deposits with the group accounted for four percent of total deposits during the half year to June 2014, up from two percent at the end of last year.

The Zimbabwe Stock Exchange-listed financial concern reported profit after tax fell 20 percent to US12,8 million during the half year to June 30 2014 from US$16 million in the comparable prior year period.Basic earnings per share fell to US4,13c from US5,64c a year ago. CBZ will return US$1,3 million to investors after declaring an interim dividend of US0,183c per share. Net interest income declined 6,6 percent to US$41 million after the group booked an increase in interest expense to US$50 million.Total assets grew 8,6 percent to US$1,7 billion, the biggest by any Zimbabwean financial institution.

CBZH reported 9,4 percent growth in total deposits to US$1,45 billion as the loan book grew 1,5 percent to US$1,04 billion. The bulk of the funds were advanced towards agriculture, distribution and service industries.

But the group’s banking unit CBZ Bank’s profit after tax declined 10,1 percent to US$12,5 million for the period under review from US$14 million on the back of increased impairment charges.

Operating expenditure for the bank rose to US$42,8 million from US$40,1 million. CBZ life underwriting income declined 10,7 percent to US$2,5 million. Profit at the unit crashed 44,4 percent to US$1 million. while profit at the insurance unit crashed 85 percent and at CBZ asset management declined 60 percent.

At full year, CBZ has guided total assets to grow 20 percent, deposits 22 percent and total income eight percent.

In the outlook period, Mr Nyemudzo said the group will continue securing long-term funding for the mortgage finance.

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