FINANCIAL group, CBZ Holdings Limited saw a near 39% increase in profit-after-tax to $1,82 billion in first half of the year due to a 100% rise in non-interest income. The increase in the profit after tax was from a 2019 comparative of $1,31 billion.
BY TATIRA ZWINOIRA
CBZ offered no explanatory notes as to how it arrived at its inflation-adjusted financial results for the six months to June 30.
Non-interest income stood at $6,6 billion from $3,29 billion last year. Driving this growth was profit on foreign currency exchange and CBZ’s agro business income of $2,09 billion and $2,89 billion, respectively.
The performance of non-interest income dwarfed CBZ’s net interest income of $720,17 million, up from $573,07 million.
Lending and credit to CBZ customers was up 55,05% to $12,24 billion from $7,89 billion, driven by increases of 175,08% and 469,42% in overdrafts and commercial loans, respectively.
CBZ’s total assets at the end of the period rose to $58,64 billion owing to increases in loans (55,05%), other assets (36,51%) money market (185,02%), and equity investments (111,16%). CBZ’s share price rose 4 198,55% in the first half of the year.
“The CBZH share price advanced by 4 198,55% to close at 2 996,52c in the first half of 2020, outperforming the overall market,” said CBZ Holdings chairman Marc Holtzman in the financial statement for the first half of the year.
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Year to date, as of last Thursday, the increase in share price was nearly 7 500%.
This performance led the Zimbabwe Stock Exchange to place CBZ in its “Top Ten Index”, the only financial firm to achieve this status.
Deposits more than doubled to $45,01 billion in the period under review, from a 2019 comparative of $22,28 billion.
However, of concern, from the financial results under review was a 126,8% increase in operating expenditure to $2,35 billion from a 2019 comparative of $1,03 billion. The increase in expenses were mainly driven by a rise in administration costs of 239,4% and a 50,31% rise in staff costs.
However, CBZ also recorded a write off in investment properties worth $131,7 million in the period under review, an expense that was not in the 2019 comparative period. Basic earnings per share rose to 701,64 cents from 505,33 cents last year.
But total income for the group was down to $2,55 billion from $3,38 billion in the prior year.
In the outlook, Holtzman said policy efforts from the authorities would remain constrained which could threaten the group’s performance.
“Both the monetary and fiscal authorities, through the mid-term policy review, announced further measures to support the foreign currency auction market, stabilise the exchange rate and prices, and ultimately the macroeconomic environment. The impact of these measures will be felt during the second half of the year,” he said.
“However, policy conduct is expected to remain constrained by the continued lack of balance of payments and budgetary support, as well as the need to balance the competing goals of supporting economic growth and social wellbeing. Nevertheless, the group remains committed to helping its staff, clients and communities in navigating the COVID-19 pandemic. The safety and wellbeing of our employees and clients will remain number one priorities.”
