CBZ deposits up 36pc

HARARE - Zimbabwe's largest financial institution by assets CBZ Bank (CBZ) says its year-on-year deposits went up 36 percent to $1, 4 billion as at March 31, 2014 from $1 billion last year.

CBZ Holdings — the bank’s parent — newly appointed chief executive Never Nyamudzo said CBZ recorded the growth despite increased cost ofdoing business and prevailing liquidity crisis, which has hit depositors.

“Total assets grew by 30,7 percent from $1,2 billion as of March 2013 to $1,6 billion in March 2014,” Nyamudzo told an annual general meeting on Wednesday.

He said funds under management leapt 15, 6 percent to $137,2 million from $123,6 million.

This comes as latest figures from the Reserve Bank of Zimbabwe (RBZ) indicate that deposits held by Zimbabwean registered financial institutions continue to decline as the liquidity crisis persists.

The RBZ said total deposits, other than demand deposits including People’s Own Savings Bank’s, stood at $1,959 billion in November 2013 down from $2,018 billion in January 2013.

It said total deposits grew to $2,108 billion in May 2013 before sliding after the July 31, 2013 general election to $1, 904 billion and subsequently registering an all-time low of $1, 877 billion at the end of August 2013.

“Premiums receivable, however, experienced a 22,3 percent decline from 3,6 million in March 2013 to 2,8 million as of March 31, 2014,” Nyamudzo said.

CBZ’s loan to deposit ratio decreased from 89,6 percent to 78,3 percent for the period under review.

Liquidity ratio plummeted to 32,5 percent from 38,1 percent in previous year while cost to income ratio declined from 56,9 percent to 67,8 percent as of March 31, 2014.

With core capital of $171,8 million, the bank’s capitalisation is above the central bank’s regulatory minimum.

“The group expects a 15 percent increase in total assets, nine percent in advances, and another 15 percent growth in deposits, a 22 percent rise in funds under management and a five percent increase in profit after tax,” said Nyamudzo.

“Although bottom-line in the first quarter fell by 43, 7 percent to $5,8 million, we are optimistic we’ll meet all our projections,” he said.

Meanwhile, CBZ Holdings recorded a profit after tax of $36, 7 million in the year to December 2013.

Due to the group’s prudence in providing $19,4 million for bad debts or non-performing loans, the profit went down from $45 million recorded in prior comparable period.

However, the recorded profit marks four continuous years, post dollarisation, of profitable operations by the group.

During the period, total comprehensive income stood at $39,9 million against $50 million registered in prior year.

Total assets increased to $1,5 billion from $1,2 billion in prior year period as total deposits surged to $1,3 billion up from $1 billion in prior year.

Advances increased to $1 billion from $854 million registered in same period last year.

CBZ net interest income for the period went down to $79,4 million from $86 million registered in prior comparable period.

Non-interest income increased to $36,9 million from $31,7 million posted in preceding comparable period.

The bank’s total comprehensive income went down to $18,7 million from $33,6 million.

The group’s insurance division CBZ Life Limited’s net written premium for the period was $7,4 million from $3,9 million in prior year’s comparable period.

Underwriting profit increased to $2,7 million from $1,8 million recorded in previous year period.

Profit after tax for the period stood at $3,2 million compared to $1,5 million in prior comparable period.

The group declared final dividend of $1,2 million.

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