CABS posted a decline in net surplus for the six months ended June 2014 to $7,2 million from $10,6 million same period last year on the back of an increase in interest expenses.
BUSINESS REPORTER
Interest expenses rose to $17,5 million in the period under review from $13,9 million recorded in the same period last year.
Board chairman Leonard Tsumba said the liquidity challenges experienced by the economy in 2013 continued into 2014 and year-on-year inflation as at June 30 2014 was -0,08%.
Tsumba said net interest income increased by 6% to $18 million from the same period last year.
“Non-interest income increased by 31% due to the increase in the number of transactions passing through the society’s various delivery channels. Comparatively operating expenses increased by 44%, mainly due to the impact of business growth,” Tsumba said.
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He said total assets increased by 21% to $694 million during the six months under review compared to the same period last year.
Tsumba said deposits grew by 23% to $529 million while loans and advances grew by 19% to $352,1 million.
Early this year, CABS managing director Kevin Terry indicated that the group would lend $100 million this year and the funds would be demand-deposit driven. The building society increased its tenure on mortgage loans to 20 years from 10 years this year.
The company recently said that 85 out of the 214 approved loans were disbursed for the Budiriro Housing Project totalling $1,6 million.
Terry said that the disbursements were continuing and demand for mortgage finance was high despite the liquidity challenges in the economy.
Two-roomed houses from Budiriro cost $22 000 and the deposit is $5 874, while the four-roomed houses cost $27 000 and the deposit is $7 258. The bank requires a 25% deposit for the total mortgage from home seekers.