CBZ profits slide as pandemic bites
FINANCIAL services giant, CBZ Holdings (CBZH) on Tuesday said inflation-adjusted posttax profits slipped to $2,44 billion during the third quarter ended September 30, 2020 after the economy suffered from the effects of COVID-19-induced lockdowns.
Zimbabwe’s biggest banking group posted $4,32 billion in post-tax profits during the comparable period in 2019.
“The COVID-19 was declared a world pandemic by the World Health Organisation on March 11, 2020 as most countries reported surging numbers of cases. In response, the government adopted restrictive measures to contain the spread of the virus. While necessary, the restrictive measures also led to a disruption of economic activities creating both threats and opportunities to the group’s business model,” CBZH said in a commentary accompanying the period’s financial statements.
Revenues declined to $10,4 billion from $11,5 billion previously in response to the total closure of economic activities as government tried to curb the spread of the pandemic.
However, the group reported gains in total assets, which nearly doubled to $90,39 billion from $47,23 billion.
In line with inflationary increases, lending increased by 262,17% to $22,74 billion compared to $6,27 billion previously.
Total deposits more than doubled during the period under review to $64,38 billion from $27,83 billion in 2019.
The group said COVID-19 might turn into an endemic disease in the coming year, which might dictate the pace and growth of the economy.
“Going into the last quarter of the year, and into 2021, a number of scenarios are shaping up for the global and domestic economies,” the group said.
“On the global level, COVID-19 is likely to gradually gravitate towards endemic status, with localised restrictions. Policymakers are expected to maintain expansionary monetary policies in order to continue supporting their economies. In Zimbabwe, the direction of most economic fundamentals largely depends on the government’s pace and approach towards reopening of the economy, in particular how the authorities will seek to boost economic activity in the key growth sectors such as the agriculture, mining, manufacturing and public sector,” CBZH noted.
The banking group said policy conduct remained generally difficult and constrained as the continued lack of balance of payments and budgetary support confined authorities to limited domestic resources.