Shortage of local cash due to hyperinflation

Century Holdings has attributed the current local cash crisis to the high rate of inflation arguing that the current highest denomination of $500 cannot support the daily cash transaction requirements of the banking public.

It says a black market for bank notes had developed, increasing transaction costs for both companies and individuals.

The cash crisis had therefore to be urgently resolved to restore confidence in the financial services sector.

In its report for the half year to June, Century saw its net profit increase from $320.9 million to $1.6 billion. Interest income grew from $2.7 billion to $7.5 billion while non-interest income increased from $1 billion to $3.5 billion.

The bulk of the profit came from Century Bank which contributed 69 percent of the earnings. Its net profit increased from $17.6 million to $802.1 million.

Earnings from the Leasing Company of Zimbabwe increased marginally from $222.9 million to $267.2 million.

The company says it took a deliberate policy to slow down the growth of the leasing book because of the difficult operating environment and the surge in interest rates which shot up to 99 percent per annum. LCZ contributed 22 percent of the earnings.

Century Asset Management contributed 6 percent of the earnings. It had a profit before taxation of $116 million, a marked turnaround from a loss of $6 million.

The company sold off Century Discount Company and Century Stockbrokers. The discount company had made a pre-tax profit of $112 million to the end of March while the stockbroking firm incurred a pre-tax loss of $58 million to the end of June.

The company is also seeking to acquire a controlling stake in INDEBank in Malawi but the regulatory authorities in both Zimbabwe and Malawi had not approved the acquisition at the time of reporting in mid-August.

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