Non interest income pushes CABS bottom line up

HARARE - Local financial retail market heavyweight CABS on Thursday reported a seven percent increase in net surplus for the year ended December 31, 2017, buoyed by an increase in non-interest income.

The bank reported a surplus of $42 million representing an increase of 7,3 percent from the $39  million in 2016 following an increase of in non-interest income.

Board chairperson  Leonard Tsumba said the company’s non-interest income grew 27 percent following increased volumes in transactions.

“Non-interests income grew by 27 percent as a result of volume increases although this was tempered by the regulator caps on certain bank charges,” Tsumba said in a statement accompanying the bank’s financials.

This was in line with trends in the financial services sector in 2017, with banks reporting rising profitability on the back of increased use of electronic money in the face of severe cash shortages.

Banks operating in the country recorded a net profit of $241,94 million for the period ended December 31, 2017, representing an increase of 33,91 percent, from $181,06 million reported in the corresponding period in 2016.

Eighteen out of 19 operating banking institutions recorded profits during the period ended December 31, 2017.

Tsumba said the building society’s interest rate margins decreased in 2017 as a result of market conditions and RBZ caps on interest rates for productive loans.

He said the bank’s interest income was constant as a result of this development.

“As a result, net interest income was constant at $59 million (2016: $59 million) despite a 15 percent growth in loans and advances over the prior year,” he said.

Expenses on operations increased 18 percent.

The loan book performed well and as a result, impairments remained at $2 million.

Total assets increased to $1,26 billion in 2017, from $1,07 billion in 2016.

— The Financial Gazette

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