ZB gets $18m Trea­sury Bills from Zamco

Chronicle (Zimbabwe) - - Business Chronicle -

LISTED fi­nan­cial ser­vices provider ZB Hold­ings says it has to date re­ceived Trea­sury Bills amount­ing to $18 mil­lion from the Zim­babwe As­set Man­age­ment Com­pany (Zamco).

Zamco was estab­lished by the Re­serve Bank of Zim­babwe ( RBZ) in 2014 to man­age the grow­ing por­tion of bad loans in the bank­ing sec­tor, threat­en­ing the dis­burse­ment of fresh loans.

ZB Hold­ings CEO Mr Ron Mu­tanda­gayi told the com­pany’s share­hold­ers this morn­ing that the ma­jor­ity of those TBs were ac­crued dur­ing the first six months of this year.

“Dur­ing the half-year to June 31, 2016, we re­ceived TBs worth $12,6 mil­lion bring­ing the cu­mu­la­tive TBs we have re­ceived from Zamco to $18,4 mil­lion in re­spect of our non-per­form­ing loans,” he said.

The CEO said it is un­likely that ZB will move from its cau­tious ap­proach on lend­ing. The group’s NPLs ra­tion as at June 30, 2016, stood at 24 per­cent.

“The rea­son this is so is that we are re­duc­ing the de­nom­i­na­tor as a re­sult of the debt work-outs that we en­gaged in. We have not ex­pe­ri­enced any more bad debts that are sig­nif­i­cant dur­ing this half-year com­pared to what we ex­pe­ri­enced in the past year or year and a half. So the ra­tion looks un­com­fort­able and man­age­ment is deal­ing with that very ag­gres­sively. Mar­ket TBs still dom­i­nate though. “Of the to­tal of $120 mil­lion for 2016, $18 mil­lion are debt sub­sti­tu­tion TBs — these are TBs we get from Zamco as a re­sult of the debt work-outs that we are en­gaged in. The $20 mil­lion is TBs for re-cap­i­tal­i­sa­tion that we got from the Govern­ment of Zim­babwe some­time last year.

We have also been a ma­jor mar­ket marker in the area of buy­ing and sell­ing TBs, and those mar­ket TBs stand at $70 mil­lion com­pared to $68 mil­lion last year. The ag­gre­gate dis­count earned from ac­qui­si­tion of TBs was 20 per­cent,” said Mr Mu­tanda­gayi. ZB’s SPV to ab­sorb $14m NPLs. The group has estab­lished a Spe­cial Pur­pose Vehicle (SPV) to cater for resid­ual NPLs that Zamco will not take and group fi­nan­cial di­rec­tor Mr Fanuel Ka­panje said the new SPV will take $14 mil­lion worth of the NPLs re­jected by Zamco.

“The amount that we ex­pect­ing to ship out to the SPV is about $14 mil­lion and that’s out of the to­tal $27 mil­lion NPLs,” said Mr Ka­panje.

“The SPV will op­er­ate as an au­ton­o­mous en­tity out­side the bank, it will have its own in­de­pen­dent board and ad­min­is­tra­tive struc­tures. But as far as the ad­min­is­tra­tive ac­tiv­i­ties, a lot of sup­port in the for­ma­tive stages will be ren­dered by the group so that we don’t in­cur sig­nif­i­cant costs up­front.

“The ex­pec­ta­tion is that we will pack­age these as­sets within this SPV. There are some as­sets that hav­ing failed to per­form as far as the man­dates that were con­tracted with the bank are con­cerned there are still some strong fun­da­men­tals that can ac­tu­ally be in­vested on go­ing for­ward. So we are go­ing to pack­age these as­sets, per­haps in­vite in­vestors that may be able to par­tic­i­pate in this SPV and as we do that cre­ate per­haps an­other in­vest­ment op­por­tu­nity for some of our in­vestors.”

Mean­while, for the half-year un­der re­view, ZB’s profit af­ter-tax in­creased by 46 per­cent over the cor­re­spond­ing pe­riod in 2015 to $5,9 mil­lion, largely on the back of sig­nif­i­cant bad debt re­cov­er­ies. — BH24

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