HUGE INTEREST IN CBZ BONDS:
CBZ Holdings says there has been remarkable interest in the $2 billion infrastructure bond the financial services group intends to float soon to raise funding for infrastructure development at State colleges.
Group chief executive Never Nyemudzo said in an interview after the group’s annual general meeting yesterday that there has been huge interest in the sovereign bond from local and foreign investors.
A trading update for the group for three months to March 2017 issued after the AGM, showed phenomenal growth in the banking group’s operations.
Mr Nyemudzo said the group will start receiving funding for the bonds once an ongoing feasibility study by a local company is done.
Proceeds from the bond will be directed towards construction of infrastructure at higher and tertiary education institutions including staff and student accommodation, lecture theatres, laboratories, workshops, administration blocks and recreational facilities.
The infrastructure bond was tended by Government through the Ministry of Higher and Tertiary Education Science and Technology Development.
Mr Nyemudzo said that the group had since contracted Dawn Properties to conduct the feasibility study on the infrastructure bonds, a process that is now 30 days into the targeted period of three months.
“Our $2 billion education infrastructure bond . . . is currently undergoing feasibility studies by Dawn Properties. We are also canvassing with potential investors. It is very interesting is the level of interest that various investors locally and regionally internationally are showing towards this bond,” Mr Nyemudzo said.
“So as soon as the feasibility study is done and the documents are there, we are going to market this locally, regionally and globally.”
The CBZ boss said the bond would run on a tab basis, with the feasibility study supposed to be completed in a period of 90 days.
“I think we have done 30 days and so there is 60 more days to go. Once we are done we will prepare an information memorandum, which we will then put to the investing public and open it on a tab basis, which means as (we) get money out, (we put some in).”
The higher and tertiary education sector has 20 universities, 15 teachers colleges, eight polytechnics and five industrial training centres with student population of 152 529 and staff population of 18 153, requiring at least 562 student hostels and 10 836 staff houses.
In terms of the group’s performance in the quarter to March 2017, Mr Nyemudzo said total income increased to $37,7 million from $35,1 million in the quarter to March 31 the prior year.
Year-on-year, total income surged 7,1 percent, the CBZ boss said. This came on the back of a 181 percent growth in transactions between the first quarter of 2016 and the first three months of this year. The value of transactions thus rose 19,6 percent to $6,7 billion.
Mr Nyemudzo said bank customer accounts also increased, jumping 5 percent between December 2016 and January 2017 to 387 000. Total assets grew to $2,134 billion in the quarter from $2, 086 billion in 2016.
Advances surged from $1, 007 billion in the first quarter of 2016 to $1, 021 billion in 2017, reflecting a 1,4 percent growth while deposits moved 1,8 percent higher to 1,809 billion in the 2017 first quarter.
Mr Nyemudzo said insurance assets rose to $8,3 million in the first quarter of 2016 from $4,9 million in the first quarter of the prior year, which was a 69,4 percent improvement on an annualised basis.
Also registering phenomenal growth was the group’s and the country’s first and only integrated financial services application, CBZ Touch, which has registered over 200 000 customers to date.
The app averaged 400 000 transactions at $26 million monthly.
“This will certainly strengthen the group’s drive towards transactional business and cushion the business against softening interest rates,” Mr Nyemudzo told the group’s AGM yesterday.