ZB Bank tightens loans selection process


ZB Bank Limited is looking to tighten the selection processes for credit loans as a way to curb reliance on credit income and increase on non-funded income, an executive said last week.


ZB Bank managing director George Nheweyembwa said the institution wanted to reduce creditors and was examining more closely those seeking lines of credit.

“We have tightened up our selection processes. So you see in our numbers that the credit book has actually declined since last year because we are being a bit more stringent about whom we are giving credit to,” Nheweyembwa said.

“However, we are staying much closer to our clients so that we have a better idea of how they are doing before and after we grant the credit.”

The banking sector is suffering from high default rates amid fears the industry could cut back on lending.

Non-performing loans in the banking sector stood at 16% as at December 31 from 30% as at September 30 last year.

ZB Bank is the flagship unit of ZB Financial Holdings which as of April 30 2015 posted a reduction in costs of 15% less than the level incurred during the same period in the prior year.


As a result, the cost to income ratio improved to 82% from levels above 100% during 2014.

“We are looking forward to a very profitable year and are reducing reliance on credit income and increasing our reliance on non-funded income. That’s how we are going to deliver that financial performance,” Nheweyembwa said.

“We are going to push the transactional business a lot more than the lending business, that’s why we are investing a lot more in these technologies that allow clients to transact more and more conveniently.”

Nheweyembwa said that ZB had taken a back seat in the market for too long and was now coming out so that it was visible with policies targeted at reducing capital expenditure.

He said through tightening the selection process for loans, ZB would choose clients who would be reliable and in turn improve the banking sector that has faced numerous challenges.

“We are trying to give our clients insight into our current business environment to try and give them an idea of where we see the market going in the next few years,” Nheweyembwa said.

“We are looking to fund clients who need to do automations and we are doing this quite aggressively in the agriculture sector particularly, but are also looking to do that in manufacturing generally with all our clients across the board.”

Nheweyembwa revealed that ZB was ahead of budget on profitability and experiencing the best first half year since the dollarisation of the economy in 2009.

However, he cautioned that even though the bank was doing better, it was still going to be a risk to lend out money in an economy that was hard hit.

“The key term in the financial sector is always about risk and price. So there is always risk. It’s about how you select the risks that you want to take and how you price the risks you are taking,” Nheweyembwa said.

ZB Bank is going to increase agency banking with over 2 000 agents nationwide and were currently big vendors for electricity in the country.


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