CABS mortgage portfolio to grow

CABS expects its mortgage portfolio to grow by 32% in 2016 in line with rising demand from customers, an executive has said.

VICTORIA MTOMBA

CABS-1

Responding to questions by NewsDay CABS managing director Simon Hammond said the deposit requirements for mortgage loans has not changed from 25%. He said the deposit for the low cost housing project in Budiriro has been reduced to 10% to make the houses accessible to low income earners.

“Our mortgage portfolio grew by 32% in 2015 and we expect a similar growth in 2016 in line with the demand for mortgage finance both local and the diaspora,” Hammond said.

He said over 500 houses have been sold from the 3 000 houses that were built in Budiriro. Hammond said two houses were demolished and rebuilt under warranty by the contractors as they had structural problems.

The economic conditions have also made it difficult for prospective buyers to acquire houses due to tight liquidity conditions.

“Our mortgage business has grown significantly despite the constrained economic environment.”

Hammond said the banking sector has not yet felt the full impact of company closures and loss of employment as most employees were taking their retrenchment package to pay off their loans while seeking employment.

In 2014, CABS secured $35 million from Proparco, a French development institution and PTA Bank that was used to construct houses in Budiriro.

CABS recorded a net surplus of $24,03 million for the year ended December 31 2014 up from $18,30 million in 2013.

Total loans and advances for the society went up 38% to $443,53 million during the 12 months under review from $322,31 million in 2014.

Net interest income in 2015 increased by 32% compared to 2014 while non-interest income increased by 51% due to the increase in the number of transactions passing through the bank’s various delivery channels.

Operating expenses for the society increased by 37% due to the impact of business growth and transformation.

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