ZB Financial Holdings has disposed of stockbroking unit and asset management firm as the group seeks a new shareholder to shore up its flagship retail banking unit ahead of the 2020 recapitalisation deadline, officials said on Friday.
Group chairman Tendai Mafunda told journalists after an annual general meeting that ZB has over the last five months been operating below break-even point due to liquidity constraints.
“Liquidity has remained a major challenge during the first half of the year in 2014, consequently business outturn has generally been constrained. The group’s balance sheet has increased marginally by two percent as at the end of May 2014 from the levels achieved as at December 31 2013,” Mafunda said.
“Trading revenue increased by three percent. However, a depressed outturn on the equity portfolio has had a significant negative impact on overall outturn to date with the result that the group is operating at slightly below breakeven level after accounting for the unrealised loss on the investments.”
Costs were 2% lower than the same period in 2013 and the group sees improved performance in the second half of the year, Mafunda said.
“Management recently decided to dispose of the group’s stockbroking unit, namely ZB Securities, and the asset management unit, ZB Asset Management Company. Both companies have been posting losses for some time and a return to profitability did not appear imminent for either company. Management has embarked on a vigorous cost-cutting exercise while attending to areas that enhance revenue inflows,” he said.
Group chief executive officer Ron Mutandagayi said ZB is still pursuing plans to merge its retail banking unit and mortgage lender to improve efficiencies.
“The current position as far as requirements as they stand, we do meet the minimum adequacy levels but for December 31 2020, we are working on a programme that is a combination of trading up to those levels as well as looking for third party investors,” Mutandagayi said.
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