3 September 2010

Zimbabwe: CBZ Bank Rules the Roost

Harare — CBZ Bank Limited wouldn’t be a choice banker for most Zimbabweans over a decade ago, but it is now dripping in fat and proving that local can still be outstanding.

Last week, when the bank unveiled its results for the half-year to June 30, 2010, it stole the limelight from other big contenders whose results came out exactly the same week. And it was for a good reason. The bank’s balance sheet became the first among domestic banks to spurt above the half a billion United States dollar threshold, becoming the biggest bank in the country by assets.

But more interesting was the big leap in advances, from US$241 million during the full year to December 31, 2009 to US$316 million during the interim period. This made the bank the biggest lender in the country at a time peers in the financial services sector are battling to create credit assets due to a liquidity crunch.

Deposits swelled from US$358 million in December 31, 2009 to US$466 million, highlighting the growing confidence the market is placing on the John Mangudya-led bank, a subsidiary of CBZ Holdings superintended by economist, Nyasha Makuvise. At the reporting date, CBZ Bank had a liquidity ratio of 30 percent.

Profit during the six-month period surged to US$9,8 million, from US$3,3 during the comparable period last year.
Interest incomes increa-sed to US$18 million during the review period, from US$4 million the previous year. Non-interest income was at US$20,7 million, from US$7,9 million.

Stanbic Bank Limited, a wholly-owned subsidiary of South Africa’s Standard Bank Group, played the little guy in a market that has previously been dominated by the foreign-owned ban-ks as it maintained its cautious approach.
The bank, which has always striven to play safe in a market that had largely witnessed errant behaviour over the crisis period, chalked up a profit of US$2,1 million during the half year ended June 30, 2010, from a modest US$348 000 recorded during the year to December 31, 2009.

Loans and advances increased from US$55 million during the year to December 2009 to US$86 million by the close of the interim period under revi-ew, helping raise 38 percent of the bank’s total income through interest.
With a deposit base of US$226 from customers, Stanbic’s loan book was less generous, considering the rush for working capital by local industries.

MBCA Bank Limited, a member of South Africa’s Nedbank Group, a unit of Old Mutual plc that is currently subject of a take-over bid by global banking group, HSBC Holdings Plc , posted a loss despite a charitable loan regime.
The bank posted an attributable loss of US$424 337 during the half-year to June 30, 2010 after incurring a US$812 160 loss during the comparable period last year.

Loans and advances during the period grew to US$71 million, from US$54 million during the comparable period the previous year. Deposits grew from US$79 million during the prior comparable period to US$117 million during the half year under review. BancABC Zimbabwe Limited, a subsidiary of BancABC Holdings Limited incorporated in Botswana, maintai-ned a small loan book, but this was significantly relative to the bank’s asset size and nonetheless far higher than during the comparable period the previous year.

Loans and adva-nces to customers amounted to US$-24 million during the half year to June 30, 2010, fro-m US$2 million du-ring the comparable period the previous year. “Liquidity management remains a top priority for the bank in a market with no lender of last resort,” said Ngoni Kudenga, chairman of Banc-ABC Zimbabwe. “Accordingly, a liquidity ratio of 36 percent was achie-ved against the regulatory minimu-m of 10 percent,” he added.

The bank posted a profit of US$911 000 for the first half of the year, driven by interest income, fees and commissions and net gains on financial instruments held for tra-ding. FBC Bank Lim-ited, part of the FBC Holdings gro-up, had grown its loan book during the six months to June 30, 2010 des-pite a contraction in customer depo-sits, which shrunk from US$95 million during the year to December 31, 2009 to US$80 million during the half year period under review.

Loans and advances to customers amounted to US$46 million during the review period, from US$21 million in the prior full year. Profit for the half year had increased marginally, failing to burst through the million dollar mark at US$694 093, from US$557 526 during the 2009 full year. However, interest inco-me had grown favourably at US$6,8 million during the half year to June 30, 2010, from US$1,4 million during the prior full year.

Fees and commission income had also come in at a respectable US$5 million, just over double the US$2,2 recorded during the full year last year. Kingdom Bank Limited still managed to grow its financial position despite a turbulent shareholder dispute at the holding firm. But its loan book remained under pressure from what it said were liquidity constraints, resulting in the bulk of advances coming as overdraft.

Customer deposits still managed to grow, demonstrating, perhaps, that perception hasn’t really suffered from the current impasse on a proposed demerger between Kingd-om Financial Holdings Limited and Meikles Limi-ted triggered by irreconcilable differences between Nigel Chanakira, the former group chief executive officer (CEO) and John Moxon, the former chairman.

The bank managed to post a reasonable profit of US$1,2 million during the half year to June 30, 2010, from a US$109 483 profit during the comparable period last year. While customer deposits grew by nearly US$40 million at ZB Bank limited, lending increased by just over 50 percent from US$20 million during the full year to December 2009 to US$43 million during the half year to June 30, 2010.

Elisha Mushayakarara, the veteran at the group who is CEO of the holding firm, ZB Holdings Limited, noted: “Banking operations carried the burden of large non-performing cash balances as the high level of deposit turnover continued unabated.”

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