- Total Income amounted to ZWL1.2 trillion
- PAT soared to over ZWL500 billion
- Monetary loss widened by 116%
Harare- CBZ Holdings Limited has achieved a substantial total income of ZWL1.2 trillion during the six months to June 2023, a significant leap from ZWL448.6 million in the same period of the previous year despite incurring a surge of 116% in monetary loss courtesy of the rapid depreciation of the local currency. However, the remarkable performance in income growth ensured the Group's profitability, with a profit after tax of ZWL543.8 billion, compared to ZWL79.8 billion in the comparative period.
Non-interest income played a significant role in driving the surge in profitability, with a remarkable increase to ZWL1.1 trillion from ZWL358.5 billion while net interest income rose to ZWL154 billion from ZWL100 billion. It is noteworthy that Zimbabwe's banking operations continue to rely heavily on non-interest incomes, which is contrary to the conventional operations banks.
During the period, the Group experienced substantial growth in loans and advances to customers, which increased to ZWL1.7 trillion, more than doubling from ZWL550 billion in the previous year. Likewise, deposits also more than doubled, rising from ZWL2 trillion to ZWL4.5 trillion.
Consequently, the Group concluded the period with total assets amounting to ZWL6.5 trillion, a significant increase from ZWL2.9 trillion, while total liabilities stood at ZWL5.2 trillion, compared to ZWL2.4 trillion in the previous period.
However, the Group recorded a monetary loss of ZWL158 billion, more than doubling by 116% from ZWL73 billion in the previous year, reducing the Group’s profitability efficacy. This was primarily driven by the high injection of the Zimbabwe dollar liquidity in the economy mainly through the issuance of 25% surrender portions to companies upsetting the principles of demand and supply.
During the six-month period from January to June, the Zimbabwe dollar experienced a significant depreciation of 89% against the US dollar in the formal market while the premium on the black market rate surged over 200%. These currency fluctuations had a detrimental impact on the company's profitability efficacy.
The substantial increase in monetary loss underscores the currency crisis currently affecting Zimbabwe. Despite the government's denial of the crisis, it is evident that the country's businesses, including the Group, are significantly impacted by the currency instability. The currency crisis creates challenges and uncertainties that hinder business operations and profitability.
CBZ Holdings is the owner of CBZ Bank, which holds the distinction of being the largest bank in Zimbabwe in terms of both deposits and assets.
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