ZB Financial Holdings posted a 168% increase in profit of $2,6 million in the half year ended June 30, 2013 compared to $959 498, buoyed by the group’s insurance arm.
In a statement accompanying the group’s half year results, ZB Financial Holdings chief executive officer Ron Mutandagayi said during the six-month period inflation remained below regional averages on the back of low domestic demand and a weak South African rand which suppressed imported inflationary pressures.
Gross reinsurance and life assurance premium income increased to $16,8 million in the six-month period from $13,1 million.
Mutandagayi said an increase in insurance expenses of 26% is consistent with the increase in business volumes.
“However, an aggregate insurance technical result of $4,3 million was posted. Additionally, an interim transfer to the life fund amounting to $1,9 million was made,” he said.
The group has two insurance units, ZB Life and Assurance Limited and ZB Reinsurance.
Total income for the group increased by 20% to $36,2 million due to a 28% increase in premium revenues and an improved out-turn on capital gains on trade investments. Interest income for the group stood at $17,7 million from $17,9 million same period last year.
Operating costs were up by 10% to $30 million from $27,4 million during the period under review.
Turning to the revocation of the group’s listing as a Specially Designated National by the Office of Foreign Assets Control of the United States of America’s Treasury department, the ZB boss said the issue remains outstanding.
“The matter in which Transnational Holdings Limited is challenging the acquisition of Intermarket Holdings Limited by ZB Financial Holdings Limited remains outstanding. The matter has been set down for hearing in the Supreme Court on June 10, 2013, but was postponed sine-die upon request by applicants,” he said.
He said the lifting of European Union restrictions early this year has helped the group reengage with many of its European correspondent banks where relationships were on hold.
Mutandagayi said a total of $1 million was spent on branch redecorations.
The group was deploying point-of-sale gadgets as it expands to various points in the country. Going forward, he said, earnings volatility continues to affect the group’s performance while a cautious approach towards asset creation will be adopted with greater emphasis being put on quality.
“Cost-optimisation will remain an operating imperative with the group having considered numerous options for cost containment,” he said.