17 May 2017

Zimbabwe: CBZ Targets U.S.$20 Million Growth in Loans

CBZ Holdings Limited is targeting to grow its loan book by $20 million this year, amid expectations that its huge stock of sovereign paper will give it access to more lines of credit.

Group chief executive Never Nyemudzo said this translated to over 5 percent jump in loans from just over $1 billion.

This comes as the bank said it will make use of its nearly $1 billion stock of Treasury Bills to attract on and offshore funding. Zimbabwe's biggest banking group has stocked up nearly half of the $2,1 billion TBs in the market.

CBZ said amid an investor stampede for the sovereign paper, it has latitude to rack up more lines of credit. "Sovereign paper, fortunately, appeals to local and international investors. Interestingly, in some of the discussions we are having, those investors are accepting the Treasury Bills as security, which reinforces the point I made last year that with the size of TBs we have, we can borrow locally and offshore," he said.

RBZ governor Dr John Mangudya said recently that the $2 billion Treasury Bills issued by Government, including for debt clearance, will help boost economic recovery and improve liquidity for holders of the securities. As a sovereign or State-issued security, TBs are considered one of the safest forms of investment across the globe.

Mr Nyemudzo said that CBZ remained attractive to foreign lines, which it has accessed and disbursed to productive sectors of the economy, of credit due to its reputation and extensive footprint within Zimbabwe.

Mr Nyemudzo also recently said that CBZ, Zimbabwe's biggest financial services employer with 6 percent share of the employment figures, processes roughly 35 percent of the country's transactions annually.

Total advances grew by 1,4 percent, year to date, to $1, 021 billion while deposits surged 1,8 percent to 1,8 billion. "Our loan book should be growing by 5 percent this year, but certainly this is net, we could disburse more," Mr Nyemudzo said.

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