CBZ reports flat half year results

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CBZ reported its results for the half year ended 30 June 2017 showing a decline in profit before tax of $11.9 million from $12.1 million prior year comparative. Return on assets was lower at 1.1% from 1.3% while return on equity was also lower at 8.1% from 8.7%. The performance was slightly underwhelming as the earnings remained stable due to reduction in costs rather than growth. Cost to income ratio was reduced to 66.0% from 72.2% prior year comparative. Interest income came out lower at $81 million against $89.2 million prior year. This we believe speaks to the RBZ’s directive calling for the reduction of interest rates. Net interest income was however higher at $39.7 million against $38.6 million. This was after interest expense came down to $41.3 million from $50.6 million after a overdraft facilities were reduced to $32.2 million from $39.8 million. We also think the reduction of expensive lines of credit to $71.4 mln to $96.2 million helped in the reduction of interest expense. Net non-interest income also recorded some growth at $36.8 million from $31.0 million prior year comparative. This was after the Group recorded significant growth in commission and fee income at $31.5 million up from $23.8 million. This resulted in total income of $80.4 million, up 8.5% from $74.1 million prior year. On the balance sheet total assets grew by 4.34%, total equity by 7.5%, total deposits by 2.76% and total advances by 2.05%. Growth in deposits since the start of the year was 2.6%  while growth in advances grew by 3.6%. The group holds treasury bills worth $827.7 million in its balance sheet up from $760.5 million. The bulk of these amounting to $528.3 million has maturity profile above 5 years. There was significant growth in those carrying maturity between 1 and 5 years at $218.9 million up 39.78% from $156.6 prior year comparative. This is a bit of a worry. The bank is holding 33.1% of the TBs in issue given that the RBZ said the TBs stock is currently at $2.5 bln. – LES

MBCA reported a 125.53% increase in profit after tax to $2.7 mln for the half year ended 30 June 2017. This was mainly due to an improved performance in total non-interest revenue which grew from $6.44 mln to $8.65 mln. The bulk of the growth was from account maintenance fees at $1.96 mln from $0.77 mln, RTGS processing fees at $1.1 mln from $0.58 mln. As expected cash withdrawal fees came down to $1.49 mln from $1.90 mln due to cash shortages. Net interest income however came in lower at $7.4 mln against $7.7 mln prior year. Total revenue grew to $16 mln from $14 mln. Total expenses were flat at $12.4 million resulting in the 125.53% profit. – ZimInd, 4 August 2017

Cabinet has approved proposals by the Ministry of Industry and Commerce for the Industrial Development Corporation to become an industrial financing entity as part of ongoing measures to restructure the firm, a Cabinet minister has said. Under this role, IDC will extend financial assistance to start ups, critical areas identified by government (leather and leather products, steel and steel products, pharmaceuticals, food processing, alternative use of tobacco, fertiliser production) and firms supported by measures to ramp up production. Industry and Commerce Minister Mike Bimha told delegates attending the Confederation of Zimbabwe Industries annual congress here that Cabinet had approved creation of a window in IDC, which caters for the funding needs of local industry. The minister said discussions were underway with the Reserve Bank of Zimbabwe on the structure and modalities under which this will be done. The industry financing role will be similar to dedicated roles by Infrastructure Development Bank of Zimbabwe and Agriculture Development Bank. – The Herald, 4 August 2017

EcoCash, the country’s largest mobile money owned by Econet Zimbabwe has announced another reduction on its monthly transaction limit for the Ecocash Debit Card. In a text message sent to its subscribers, Econet said cardholders can now only transact up to $300 per month. “This limit is split, with $50 set for ATM cashouts, $200 for POS (point of sale) transactions and another $50 for online purchases,” the text read. This is the fourth reduction of transactions from EcoCash. In October 2016 it set its limit at $1 100 and then revised this to $500 in December 2016. In February this year, the amount was further reversed to $400 per month, split between $200 for ATM cash outs and $200 for POS (point of sale) transactions and virtual payments which cover online purchases. Just last month, Econet scaled down the issuance of new debit cards for the EcoCash service, in line with the central bank’s directive to monitor foreign expenditure. – The Herald, 4 August 2017

The takeover of Barclays Bank Zimbabwe by Malawi based First Merchant Bank has hit a new snag and is under threat from the controversial indigenisation policy compelling foreign investors to cede 51% stake to locals, it has been established. Sources in the Office of the President and Cabinet said the deal, which is now awaiting final regulatory approval from the Reserve Bank of Zimbabwe, is heading for a dramatic reversal after the OPC and the Indigenisation ministry reached a conclusion that the acquisition was illegal. “At the highest office, it has been resolved that this deal should not go ahead because it does not meet indigenisation regulations,” a senior official from the OPC said. “A law is a law in any country unless it has been changed. In this case, the law has not been changed. The deal does not comply with the law as it exists. Besides, the policy framework remains the same.” Government, another source said, is also unhappy that the take-over will not benefit the country as the parent company of the new entity is going to be domiciled offshore.  – The Herald, 4 August 2017

Barclays today published further cautionary statement saying Barclays Bank Plc and FMB are in the process of fulfilling the conditions precedent to the transaction, which include, but are not limited to, approval by the Reserve Bank of Zimbabwe. – Daily News, 4 August 2017

Nearly 1 300 workers have been retrenched from various sectors of the economy in the second quarter of 2017 with parastatals accounting for more than 60% of those laid off, bringing the number of those laid off in the first half of the year to more than 2 000. This is revealed in statistics compiled by Ministry of Labour and Social Welfare at a time the economic crisis, characterised by a debilitating liquidity crunch, a crippling cash shortages, declining investment inflows, company closures and job losses, deepens. According to the statistics, a total of 1 282 workers were retrenched between the period of April to June 2017. This is in addition to the 817 workers retrenched in the first quarter, bringing the total of workers laid off in the first half of the year to 2 099. – Independent, 4 August 2017

Government will soon deal with illegal vendors who have crowded out open spaces and pavements in urban areas, especially Harare, to restore sanity in city centres. This was said by Local Government, Public and National Housing Minister Saviour Kasukuwere while responding to senators during question time yesterday. Harare has lost its sunshine status due to an influx of vendors in the city centre that has resulted in the random disposal of garbage while vendors relieve themselves on pavements. “You have someone coming to sell their wares in front of someone’s shop who is paying rates, it’s not fair. I was walking in First Street and some pavements are now impassable,” he said. Kasukuwere also said government would deal with space barons that were collecting money from the vendors. – The Herald, 4 August 2017

SeedCo today published results of the dividend offer to shareholders where 13 740 shareholders opted for cash amounting to $4 595 303,61 and 585 shareholders opted for scrip resulting in additional 3 637 574 shares. The new issued shares were listed on the ZSE on August 2. – The Herald, 4 August 2017

By |August 4th, 2017|Categories: Headlines|

About the Author:

Kudzanai Sharara
Kudzanai’s background in financial journalism with ZFN, combined with a continuing education in financial management, provide a solid grounding for his work in the research department.