ZB Financial Holdings’ revenue rose by 655% to $34,414 billion in the first quarter of this year, driven by growth in non-funded income and earnings from lending activities.

The group’s total income in the prior period stood at $4,558 billion, according to the financial services firm’s trading update for the quarter ended March 31, 2023.

The trading update was in historical terms due to the unavailability of relevant consumer price indices which facilitate reporting in inflation-adjusted terms.

“The growth in revenue was underpinned by growth in net income from lending activities and non-funded income,” ZBFH secretary Tinashe Masiiwa said.

“During the quarter under review, the business witnessed growth in both local and foreign currency transactions driven by enhanced digital channels, physical service centres and the international virtual service centre.”

During the same period, the group’s foreign currency revenue contribution to total trading revenue was 29% .

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Masiiwa said adverse movement in exchange rates continued to put pressure on operating expenses, resulting in the cost-to-income ratio deteriorating to 54% from 44% in the first quarter of last year.

Total assets increased by 20% to $381,537 billion, while income-earning assets constituted 64% of total assets.

The group maintained an aggregated liquidity ratio above 60%, which was adequate to accommodate short-term fluctuations in customer demands.

Asset quality remained strong, with the non-performing loans ratio having been contained within the target rate of 5% throughout the quarter.

Deposits and other accounts were at $153,70 billion while the group’s total equity increased by 10%, to $160,747 billion.

Masiiwa said all group entities were compliant with regulated capital levels, except for ZB Building Society.

He, however, said the group was confident that the non-compliance of the entity would be resolved by consolidating its banking operations before December 31, 2023.

The financial services concern has missed numerous central bank minimum capital requirement deadlines.

The bank was expected to meet a minimum capital requirement of US$30 million or Zimbabwe dollar equivalent effective December 31, 2022 and the building society’s US$20 million or Zimbabwe dollar equivalent.

Masiiwa said Zimbabwe’s economy was expected to grow this year, boosted by diaspora remittances, growth in mining, construction and agricultural sectors.

“However, the group anticipates that the economic conditions will be challenging due to high interest rates, rising exchange rates and distortions in price dynamics,” he said.

The group also believes that authorities are likely to maintain tight monetary and fiscal policies to maintain stability in the economy.

To protect its capital position from adverse economic conditions, the secretary said they would continue to pursue strategic business partnerships, improve its sustainable revenues, implement foreign currency revenue generation strategies and exploiting investment opportunities.

“In order to increase its sustainable revenue, the group will make use of the world class service centres and the digital assets and the robust electronic channels to market its products,” he said.

Furthermore, cost-cutting measures continue to be a priority in order to boost profitability, he added.