CBZ Holdings, Zimbabwe’s largest local financial group, yesterday reported a 32 percent drop in profit after tax to $23.7 million in the full year to December from $35.2 million last year and its Treasury Bills holdings doubled to $766 million.
Presenting company results yesterday, finance director Colin Chimutsa said non-interest income had contributed 43.4 percent to group revenue up from 34.3 percent in 2015 as the group tries to absorb the effect of reduced interest rates.
The central bank in 2015 directed banks to lower interest rates, which had been as high as 30 percent, to between 6 and 18 percent per annum, depending on the borrower’s risk profile.
“We are fully aware of the pressure on margins given the reduction of interest rates…we need to accept that margins of 5 percent are now difficult to achieve hence our focus on non-interest income,” he said.
The banking unit contributed $118 million to group revenue, with deposits going up 5.5 percent to $1.7 billion from $1.6 billion last year.
Non-performing loans (NPLs) were largely flat at 6.6 percent compared to 6.9 percent last year.
Chief executive Never Nyemudzo said the bank would maintain ‘strict credit granting and closer monitoring of borrowers.’
Advances remained flat at $1 billion.
“We will continue with our cautious approach to foreign lines of credit as we watch the trends on the local interest rates to avoid pricing challenges, as such we have deliberately allowed some lines to run down so that we take advantage of repricing at the appropriate time,” he said.
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