ZB Financial Holdings Limited, reported a plausible set of results for the half year ended June 30, 2018, with chief executive officer Ron Mutandagayi, saying performance was spurred by an increase in the number of accounts and transaction volumes.
The group’s net profit amounted to $9,4 million for the period, a 15 percent increase from $8,2 million recorded prior year comparative. Earnings per share was up 16 percent to US 0.058 cents.
Total income for the group was up 12 percent to $38,6 million for the half year from $34,5 million achieved prior year comparative, but earnings from traditional channels have been sliding down, Mr Mutandagayi said.
The bulk of the income came from non-funded income with a contribution of 72 percent with the balance of 28 percent coming from net interest income.
Other income, which makes up the bulk of non-funded income was up 14 percent to $22,9 million from $20,1 million.
According to Mr Mutandagayi other income was largely driven by a 14 percent increase in banking customers as well as a general increase in the number of transactions particularly through the electronic banking channels.
Net income from lending activities, amounted to $10,9 million in 2018 up 39 percent from $7,9 million in 2017, as interest paying liabilities re-priced faster than assets in an environment in which rates fell down.
While interest and related income was static at $13,1 million, interest expenses were reduced to $2,9 million from $4,2 million prior year comparative
Net revenues from the group’s insurance activities remained flat at $4,9 million, with gross premiums having increased by 6 percent to $16,5 million for the period under review up from $15,5 million prior year.
The increase in gross premiums was largely influenced by increased business out-turn from the life assurance operations at 18 percent whilst the reinsurance premiums remained flat against the backdrop of reducing external business as foreign exchange risk became more amplified.
The group has also seen satisfactory traction in its advisory activities with 6 percent (2017 — 5 percent ) of the other income having been mobilised from advisory and capital raising mandates for clients.
Total assets for the group increased by 10 percent to $579,8 million as at June 30, 2018 from $527,1 million as at December 31, 2017. This follows a 19 percent increase in cash and short-term funds to $87,6 million, a 20 percent increase in the treasury bills portfolio to $187 million and a 59 percent increase in investment securities to $58,3 million as investment shifted to money market assets paying better returns.
Treasury bills pay interest rates of between five and 10 percent while the RBZ’s savings bond pays interest rates of seven percent.
General lending retreated by 3 percent ($98 million for mortgages and other advances) with significant reduction being recorded in loans to the manufacturing sector as well as the private sector, said Mr Mutandagayi.
The reduction was also attributed to the combined effect of the adoption of a new International Financial Reporting Standard of Financial Instruments (IFRS 9) and the slow pace of loan asset creation as credit absorption in the productive sector remains low.
IFRS 9 resulted in increased loan loss provisions with adjustments being made on opening balances.
Non-performing loans constituted 10,1 percent of the gross loans as at June 30, 2018, an improvement from 10,7 percent reported at December 31, 2017.
Earning assets were maintained at 77 percent between December 31 2017 and June 30 2018. Deposits and related accounts increased by 13 percent to $391,5 million from $347,1 million at December 31, 2017.