CBZ capitalises subsidiaries

FINANCIAL services group, CBZ Holdings, says it has adequately capitalised all its subsidiaries in line with regulatory minimum capital requirements.

In a latest trading update for the quarter ended March 31, 2020, CBZ Holdings said only two of its subsidiaries, CBZ Insurance and Redsphere Finance were yet to comply with the minimum capital regulatory thresholds.

Under the minimum capital regulatory framework, commercial banks are required to have US$30 million by December 31, 2020, development banks, finance and discount houses (US$20 million), deposit taking microfinance banks US$5 million and credit only microfinance banks US$25 000.

The Insurance and Pensions Commission also announced guidelines for the insurance and pensions industry on adjusting the insurance and pension values in response to the currency reforms.

“The group’s subsidiaries were in full compliance with their regulatory minimum capital requirement except for CBZ Insurance and Redsphere Finance, which had regulatory capital shortfalls of $12,4 million and $1,99 million respectively at the end of the quarter.

“The group managed to regularise these shortfalls by availing appropriate funding to the two subsidiaries during the month of April 2020,” said the group.

Commenting on the effects of the Covid-19 pandemic, CBZ said the disease is having a significant impact on global and domestic economic activities as governments adopt restrictive measures to curtail the spread of the virus.

“In Zimbabwe, Government and private sector efforts to fight the virus is resulting in new threats and opportunities to the group’s business model.

“As the outbreak continues to spread globally, the operations of the group have not been spared,” it said.

Due to the lockdown that has been necessitated by the need to curtail the spread of the virus, most of the group’s branches and head offices have either been closed or are not operating at full capacity.

Most of the CBZ Holdings employees are working from home with the exception of staff members that are required to be available physically within the work premises.

“Transactional volumes have declined during the lockdown period as a result of the restriction in movement and the requirement that only essential services be allowed to operate during this period,” it said.

The group said borrowers, especially those that are in the hardest hit industries such as tourism and hospitality have had their businesses affected and consequently, their ability to service debts.

The group said Covid-19 will however not have an inhibiting impact on its financial activities and position as most of its services and business activities have been and can be migrated to online platforms.

It said it has put in place various measures to support its clients and counter the effects of the Covid-19 pandemic.

Such measures include aggressive use of digital channels, remote working and limited services.