Listed financial services provider, ZB Financial Holding income for the first quarter (Q1) doubled due to growth in earnings underpinned by a 291 percent (inflation adjusted) increase in fair value credits and foreign exchange income.
This reflected the asset value adjustments in line with changes happening in the operating environment.
In its Q1 trading update, the Group’s total income increased by 111 percent from ZW$2.295 billion for the 3 months’ period ended 31 March 2021 to ZW$4.852 billion recorded in March 2022.
The said Group said its regular income sources were under pressure and improved by much lower rates as follows: 79 percent for net earnings from lending activities on the back of 4 percent increase in earning assets, 20 percent for banking commissions and fees as a result of 30 percent increase in number of accounts and 8 percent increase in number of transactions, 28 percent for net re-insurance income and 177 percent net life assurance income.
Operating expenses increased by 47 percent, in response to inflationary pressures and weakening of the Zimbabwean dollar (ZW$) against the USD. The cost to income ratio, however, improved from 64 percent in prior period to 44 percent for the period under review.
Total assets for the Group as at 31 March 2022 closed at ZW$64.1billion, having increased by 6 percent from the total of ZW$60.5 billion as at 31 December, 2021.
Income earning assets constituted 55 percent of total assets. The Group maintained an aggregated liquidity ratio above 60 percent which was adequate to accommodate short term fluctuations in customer demands.
Asset quality remained good with the non-performing loans ratio having been contained within the hurdle rate of 5 percent throughout the period.
Deposits and other accounts increased from ZW$24.4 billion at 31 December 2021 to close at ZW$25 billion as at 31 March 2022.
The Group’s total equity increased by 7 percent during the quarter, closing at ZW$25.8 billion as at 31 March 2021. All Group entities with regulated capital levels as at 31 March 2022 were compliant, except for ZB Building Society.
“We are confident that the non-compliance of the Building Society will be resolved by consolidating its Banking operations before 31 December 2022,” the Group.
The company has however expressed concern over the recent directive by the government suspending bank lending.
“Although uncertainty abounds in the outlook, especially given the temporary restrictions on lending announced by the Government subsequent to the end of Q1 2022, the Group remains cautiously optimistic regarding the macroeconomic trajectory.”
During the period under review, the Group launched 2 Sales and Service Centres, one at First Street in Harare, and the other at JMN Nkomo in Bulawayo, consistent with the Group’s strategy to convert branches into Sales and Service Centres as part of its on-going transformation program.
