Century manages an 809% profit increase despite liquidity crunch

Century Holdings, whose bank had to be rescued by the Reserve Bank of Zimbabwe following a liquidity crunch towards the end of last year, managed to make a net profit of $3.2 billion last year an increase of 809 percent over the previous year.

The financial house which had joined the bandwagon of institutions expanding into the region had to curtail its regional operations because of the risk affecting the money transfer business worldwide.

According to its report for the year ended December, interest income shot up from $6.4 billion to $40.4 billion but net interest income only rose from $1.2 billion to $5.9 billion.

This was boosted by non-interest income which rose from $3.1 billion to $19.9 billion.

Fees and commissions were nearly $5 billion while the bulk of the non-interest income was in the form of gains from dealing in securities and foreign exchange which contributed $12.2 billion.

Though it suffered a liquidity crunch at the end of the year Century Bank recorded an operating profit of $5.2 billion, which was a 1 309 percent increase over the previous year. It contributed 53 percent of group pretax profit. The bank acquired four country branches as going concerns. These were in Gwanda, Zvishavane, Gokwe and Kariba. It also opened three town branches in Harare.

The Leasing Company of Zimbabwe contributed 32 percent of group pretax profit. Its pretax profit grew by 496 percent from $537 million to $3.2 billion.

Century Asset Management contributed 14 percent of group pretax profit. It turned around from an operating loss of $56 million in the six months to December 2002 to a pretax profit of $1.4 billion last year.

The company disposed of its Century Discount House in April 2003 when it sold the entire shareholding to ENG Investments. The discount house was closed on 2 January by the central bank and its parent company was placed under provisional liquidation.

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