ZB Financial Holdings (ZB) suffered a nine percent drop in revenue for the year ended December 2020 to record ZW$3.323 billion from ZW$3.656bn registered in 2019, owing to a bank fees freeze that weighed heavily on income.
Last year, the Reserve Bank of Zimbabwe (RBZ) suspended increases in bank charges to cushion depositors against the economic effects of the COVID-19 pandemic.
The Group’s revenue performance was also underpinned by an 87 percent decrease in fair value adjustments, from ZW$1.032bn in 2019 to ZW$0.136bn in 2020.
Banking commissions and fees also fell in real terms by 8 percent, from ZW$1.242bn in 2019 to ZW$1.142bn in 2020, as inflation continued to outpace rate adjustments for commissions and fees.
“The subdued revenue performance in 2020 was mainly due to the combined effects of low-cost absorption as performance of most economic sectors receded,”
“This was compounded by the freeze on banking fees by the authorities which was necessary to ameliorate the effects of COVID-19 on industry and the general public,” the Group said.
Net interest income increased by 0.34%, from ZW$0.657bn in 2019 to ZW$0.660bn in 2020.
Loan impairment charges to the income statement decreased from ZW$0.339bn in 2019 to ZW$0.282bn in 2020 although overall credit quality continued to improve, with non-performing loans as a percentage of total loans reducing from 2 percent in 2019 to 0.7 percent in 2020.
Gross premiums increased by 2 percent from ZW$1.128bn in 2019 to ZW$1.148bn in 2020, whilst the related expenses increased from ZW$0.728bn in 2019 to ZW$1.149bn in 2020.
Other income increased by 152 percent, from ZW$0.663bn in 2019 to ZW$1.669bn in 2020, mainly underpinned by exchange gains.
Operating costs increased by 25 percent from ZW$2.222bn in 2019 to ZW$2.789bn in 2020, largely influenced by a catch-up adjustment on the cost base in tandem with the inflation profile over the past 2 years.
The Group posted a net profit after taxation of ZW$1.065bn in 2020, representing a 45 percent decline from the ZW$1.939bn attained in 2019.
Meanwhile, the Group’s total assets increased by 21 percent in real terms, from ZW$15.636bn as at 31 December 2019 to ZW$18.977bn as at 31 December 2020.
At ZB Bank Limited posted a profit of ZW$0.633bn in 2020, as compared to ZW$0.819bn in 2019. The reduction in profitability was mainly as a result of an increase in operating expenses from ZW$1.632bn in 2019 to ZW$2.284bn in 2020.
ZB Building Society posted a loss of ZW$0.055bn for the year ended 31 December 2020, reducing from a profit of ZW$0.285bn in 2019. Its assets increased from ZW$1.043bn as at 31 December 2019 to close the year 2020 at ZW$1.119bn.
ZB Reinsurance posted a drop in profit of ZW$0.086bn in 2020 compared to ZW$0.113bn in 2019. Its total assets increased in real terms from ZW$0.678bn as at 31 December 2019 to close the year 2020 at ZW$0.839bn.
