ZB Group defies adverse Covid-19 impact
ZB Financial Holdings Group says its performance outturn for the second quarter ended 30 June 2020 remained solid despite the adverse environmental factors affecting the country’s economy.
With the detailed financial results for the half year period set to be published before the end of this month, group chief executive officer Mr Ron Mutandagayi, said ZB Holdings has managed to score some milestones within the reporting period, whose fortunes has been generally characterised by depressed economic activity following the outbreak of Covid-19 and the subsequent lockdown measures.
The health crisis has stoked economic fragilities, which had existed previously and continue to affect business operations. These include continued increases in general level of prices, foreign currency exchange regime discrepancies, shortages of basic commodities, notably fuel and staple grains as well as high inflation averaging 21.48 percent with year-on-year inflation closing the period at 737.32 percent.
Mr Mutandagayi said ZB’s total income for the second quarter (Q2) was 548 percent higher than the total revenue earned in the first quarter (Q1). Cumulative income for Q2 was 2 955 percent up on the total revenue posted in the comparative period in 2019. Similarly, the period saw the group increasing its aggregate number of accounts in the banking operations by nine percent.
“Income growth was largely anchored on fair value credits and foreign currency exchange gains, collectively making up 89 percent of total revenue,” he said in a latest trading update.
However, core business revenue growth continued to lag behind inflation movements while deposits increased by 107 percent in half year period compared to full year 2019. Mr Mutandagayi said loans and other advances grew by 164 percent during the half year period compared to full year 2019 with letters of credit contributing 23 percent to total loans and other advances.
During the period under review the group was able to maintain liquidity reserve above the recommended level required to meet its short-term commitments, he said, adding that the aggregated liquidity ratio for banking operations was above 80 percent throughout the period.
“All business units in the group operated above their regulated capital levels. In terms of the Capital Plan submitted to the Reserve Bank of Zimbabwe, the group is confident that its banking operations will be able to meet the revised capital levels that are expected to come into effect from 31 December, 2020,” said Mr Mutandagayi.
The banking group expects the economy to remain fragile with Covid19 ushering in a new social order with widespread implications on the conduct of business. While lasting solutions are being sought to address these challenges, Mr Mutandagayi said ZB Holdings will seek to review and deepen its internal capacity in preparation for business beyond the current crisis.
The group has already completed technical processes for the re-launch of the VISA International Debit card and that regulatory approval for the product has been granted ahead of formal product launch. Other new products include a refreshed WhatsApp banking facility, diaspora banking and the international cash funeral plan.