HARARE - Zimbabwe Stock Exchange-listed financial services group, ZB Financial Holdings (ZB), yesterday said it recorded a 191 percent increase in profits to $8,9 million last year from a loss of $9,8 million in 2014.
ZB chief executive Ron Mutandagayi told analysts that the company, which performed exceptionally well in spite of the volatile economic conditions, will continue to look for opportunities to grow its asset base and profits.
“The recent recapitalisation of the banking operations by the injection of $20 million through Treasury Bills during the year has strengthened overall underwriting capacity which the group will leverage on, going forward,” he said.
In the 12 months to December 2015, ZB saw its aggregate earnings from lending and trading activities increasing from $11,9 million in 2014 to $13,6 million despite a 13 percent reduction in net interest income.
“This positive outturn was achieved as a result of a $10,9 million recovery from previously written off debts. Gross loan impairment charges during the year increased by 80 percent from $7,7 million in 2014 to $13,8 million in 2015. The depressed net interest income is a result of a reduced credit portfolio and a general weakening of rates as credit absorption capacity on the market continued to deteriorate,” Mutandagayi said.
He added that ZB’s net revenue reduced by one percent to $56,7 million in 2015 compared to $57,3 million in 2014.
“This was largely as a result of a higher fair value loss on investment properties and stocks which amounted to $2,7 million in 2015 compared to $0,8 million in 2014, an increase of 251 percent,” he said.
The financial services group, which closed its two branches in Redcliff and Checheche and relocated its head office to a new complex in Avondale, also witnessed its total assets increasing by 12 percent from $379,8 million in 2014 to close the year 2015 at $424,1 million.
“A rebalancing of the asset mix was undertaken during the year, and saw an 871 percent increase in money market investments ($117,5 million) being achieved against a 32 percent reduction in credit instruments ($99,6 million).
“While credit creation receded in response to amplified default risk, money market instruments, largely treasury instruments, were chosen for their mild impact on capital adequacy measurements,” Mutandagayi said.
Although Zimbabwe’s deposits remained transitory and very sensitive to short-term market dynamics in 2015, ZB’s deposits increased by five percent to close the year at $269,7 million.