CBZ: Zimbabwe’s best bank in 2018

Tawanda Musarurwa

CBZ Bank has been voted as Zimbabwe’s best-performing bank in 2018 by US-based Global Finance Magazine.

CBZ Bank, which has an asset base of US$ 2billion and deposits worth $1,8 billion, is considered the country’s largest bank.

The valuation was, however, before the recent Monetary Policy Statement, which revalued some assets into RTGS dollars at a rate of 1:1 to the US dollar.

According to the New York-headquartered Global Finance Magazine, the bank managed to skirt slow economic growth rates that “could hamper future lending as non-performing loans continue to rise”.

“In Zimbabwe, CBZ Bank managed a 16,8 percent rise in profits (for the six month to June) last year, despite the fragile economy and a sharp rise in non-performing loans.

“The bank, the country’s largest, processed about one-third of Zimbabwe’s banking transactions in 2017.

“The country’s economy could grow as much as 6 percent this year, as President Emmerson Mnangagwa’s government pursues economic reforms to attract foreign investment,” said the magazine.

An analysis of Sub-Saharan Africa’s financial services providers by Moody’s Investors Service senior vice president Constantinos Kypreos at the beginning of last year indicated that regional banks faced the same headwinds.

“Although African banks will maintain solid capital and local-currency liquidity buffers in 2018, macro-economic conditions will remain difficult in a majority of African countries. Economic growth will remain below historical levels, while political uncertainty will dampen confidence and governments’ capacity for fiscal stimulus will be limited,” he said.

For the half-year to June 30 2018, CBZ reported a mixed set of results as its interest income was subdued owing to a shrinking loan book.

But lower impairments and higher non-interest income drove significant growth on the bottom-line.

Interest income for the period amounted to US$69,16 million, down from US$81 million, which was as a result of a 48,7 percent decline in income from overdrafts, despite income from Treasury Bills (TBs) increasing by 29,3 percent.

Interest expense was 31,3 percent down at US$28,4 million, from US$41,33 million, resulting in net interest income of US$40,8 million, which was marginally higher than US$39,7 million reported in the prior comparable period.

The bank recorded a 43 percent growth in Point of Sale (POS) machines countrywide, a 25 percent growth in the number of merchants and agents, a 26 percent growth in CBZ Touch (the bank’s mobile banking app) subscribers and a 22 percent increase in number of accounts held from the first half of FY2017 to the period under review.

Resultantly, net non-interest income for the half-year period was up 29,6 percent from US$36,8 million to US$47,7 million.

The bank was founded in 1980 as the Bank of Credit and Commerce Zimbabwe Limited (BCCZL), but in 1991, BCCZL ran into financial difficulty and faced liquidation.

Government moved in and acquired the entire shareholding in the bank to avert its closure.

After the takeover, the bank was renamed Commercial Bank of Zimbabwe Limited, and later in 2004, it was re-organised and renamed CBZ Bank Limited.

CBZ Bank Limited became a subsidiary of CBZ Holdings Limited, whose shares are traded on the Zimbabwe Stock Exchange.