Zimbabwe News and Internet Radio

CBZ declares $1,2 million dividend

By John Kachembere

HARARE – Zimbabwe’s largest financial services group by assets, CBZ Holdings (CBZ) has declared an interim dividend of $1,2 million for the half year ended June 30, 2014.

Vice President Joice Mujuru (right) at a CBZ Holdings function
Vice President Joice Mujuru (right) at a CBZ Holdings function

The group’s Board declared a half-yearly cash dividend of $0,183 per share on its common stock to be paid on September 16, 2014 to shareholders of record on September 5, 2014.

This payment makes CBZ — with an asset base of over $1,7 billion — one of the most consistent financial services providers to reward its shareholders in the current harsh economic environment.

Other companies that recently declared dividends include British American Tobacco Company, Old Mutual, Nicoz Diamond, Colcom, Innscor and TSL among others.

Market watchers claim that some companies may be forced by the major shareholder to declare dividends, while others may declare dividend as a way of managing perception because the public will rate highly a company that pays dividends in such an environment irrespective of their cash flows.

Most companies operating in Zimbabwe have not been declaring dividends since dollarisation in 2009 in an attempt to sustain their business operations, as the liquidity crunch
continues to bite.

An analyst with a local bank said many companies were trying to increase their capacity in order to accrue economies of scale.

“However, accessing concessionary loans for these projects is the major challenge. The loans currently offered by local banks are short term, due to the transitory deposits coming through,” she said adding that bank deposits are also very low, with the loan-to-deposit ratio already high.

“Due to Zimbabwe’s bad credit rating and our high national debt, it is impossible to access concessionary loans outside the country,” she added.

In the six months to June, CBZ reported a 27 percent fall in earnings after reducing the value of some assets and due to a one-off expense to upgrade its technology systems. Daily News