CBZ profits rise

ZIMBABWE Stock Exchange-listed banking group, CBZ Holdings Limited, shrugged off a financial sector turmoil, worsened by an internal Real Time Gross Settlement (RTGS) crisis in January, to post a US$18,3 million profit after tax during the half-year to June 30, 2012.

The diversified banking group, whose flagship commercial banking unit, CBZ Bank Limited, once overwhelmed by an overflow of mostly government-related business in its RTGS systems, had reported US$13,7 million in post tax profit during the prior comparative period.

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Net interest income moved to US$42,4 million during the review period, from US$33,6 million during the prior comparative period in 2011, as basic earnings per share rose to US 2,92 cents per share, from US 2,18 cents during the half year ending June 2011.

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The picture may certainly not be so rosier in several financial institutions who are yet to come to the market with their results.

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Some are likely to come under significant strain due to new central bank capitalisation thresholds, which were raised from US$12,5 million for commercial banks to US$100 million. Compliance is expected to be phased over a two-year period and banks have until June 2014 to meet the new requirements.

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CBZ Holdings’ chief executive officer, John Mangudya, told analysts last week that he was not concerned about profits, or raising capital; his preoccupation would be the diversification of the group’s income, expanding markets and managing lending to fortify his grip on the market.

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“The (commercial) bank’s capital is US$103 million. We are above the (prevailing) US$12,5 million, above the US$100 million, above 2014. So capital is not an issue for us,” said Mangudya.

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“We want to continue to diversify our income. We are going to continue that with vigour and rigour. We will restrain lending but we will be vigorous in collecting,” he said.

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Non-performing loans declined to US$44 million during the half-year to June 30 2012, from US$48 million.

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With a strong balance sheet of almost US$1,2 billion, the bank said it still had the appetite to expand and grow shareholder value.

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CBZ declared a dividend of 0,132 US cents.

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“We are saying once we start we don’t want to stop (declaring dividends),” said Mangudya.

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“We are going to continuously increase our dividend to our shareholders,” he said.

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Mangudya said CBZ would be active in lending to small to medium scale businesses leveraging on a recent loan from a Sudanese bank, but warned that only enterprises with a clean track record from previous borrowings would access new cash.

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He said Datvest, which had concentrated on the local market, will diversify its scope of operations.

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“Datvest is concentrating on the local market. We want it to go offshore, not by opening offices but by tapping into the offshore market. We are on the right track (with) our business model,” said Mangudya.