ZIMBABWE’S largest financial group CBZ Holdings has reported a 43,7% decline in after-tax profit for the first quarter ending March 31, compared to the same period last year, dragged by a drop in income and accelerating impairments, the group announced on Wednesday.
Incoming group chief executive Never Nyemudzo told shareholders on Wednesday during the company’s annual general meeting that the slowdown in economic growth had affected operations.
Nyemudzo replaces John Mangudya who was appointed Reserve Bank of Zimbabwe governor with effect from May 1.
Total income dropped to $34,4 million in the during the period under review to $37,2 million recorded during the same period last year. Underwriting income was flat at $1,7 million.
“The first quarter under review has been largely characterised by liquidity challenges.
“This has somehow increased the cost of doing business primarily coming out of increased cost funds for the bank.
“As a result we are seeing pressure on our customers meet their obligations on time,” Nyemudzo said.
The group’s total deposits were up 36% year on year to $1,427 billion with loans and advances growing to $1,079 billion from $934,1 million in March 2013.
Total expenditure rose to $23,3 million from $21,2 million while the charge for impairment was up 52% to $3,8 million.
Despite taking a knock during this period, Nyemudzo sees the group’s after-tax profit for the full year growing by 5%.
He said the group will in the coming year focus on taking a conservative lending approach and growing its housing project to boost revenues.
CBZ Holdings has embarked on the first phase of the 1 095-stand Nehosho high-density suburb in Gweru.
The housing project, which is set to be completed in the next eight months, will cost $8 million, Nyemudzo said.
Commenting on the planned $200 million bond, he said plans to raise the capital were now at an advanced stage.
In February, CBZ Holdings announced plans to issue a $200 million bond, double what it raised in the fixed income market last year, to boost its underwriting capacity.
— The Source