ZB Financial Holdings (ZBFH) subsidiary ZB Reinsurance is set to expand its insurance business into Mozambique by next year as the company seeks to spread wings into the region.
“We are looking at getting into the market in the next 12 months. We are entering into Mozambique because the market is growing in terms of foreign direct investment (FDI) and there are opportunities in the Mozambique reinsurance business,” ZBFH group chief executive officer Ronald Mutandagayi said.
ZBFH wholly owns ZB Reinsurance.
Local companies see opportunities in Mozambique as the country has one of the fastest growth rates in the Sadc region. The International Monetary Fund projects Mozambique to register a real gross domestic product growth rate of 8,3% this year and 7,9% in 2015.
FDI into Mozambique was $2,1 billion in 2013.
Mutandagayi said during the six months ended June 2014 the insurance business recorded net insurance income increase of 2% contributing 15% to the total income.
“The life assurance operations contributed 11% and the reinsurance operations contributed 9% to the net outturn, after recognising an impairment charge of $392 700 on premium debtors at the reinsurance business,” he said.
Mutandagayi said for the six months period under review the group posted a loss of $2,6 million compared to a profit of $2,2 million the same period last year.
Total income for the group went down 22% to $26,8 million compared to $34,5 million the same period last year while net interest income was down 10% to $9,5 million from $10,6 million same period last year.
Operating expenses stood at $28,9 million from $29,3 million in the prior year.
Mutandagayi said assets were up 4% to $344 million and deposits were up 6% to $231 million.
“Fees, commission-based charges and other income, at $17,3 million reduced by 7% from the comparative period. The reduction is a result of limited off-take on credit creation commissions as a result of the deliberate suppression of lending activities in preference of higher quality assets,” he said.
Mutandagayi said the group expects to make profits in the second half of the year as the first half was slow. He said the group closed its two subsidiaries ZB Securities and ZB Asset Management as part of its cost-cutting measures and reduced its staffing levels to 1 200 from 1 600.
“We are looking at right-sizing of the group. We think we can bring the number down to 900 from the 1 200,”he said.
Mutandagayi said from a total of 66 branches, five were not making profit as they were in their infancy and would make profit later on.