CBZ non-performing loans surge 27pc

By Michael Tome

The country’s biggest financial services group, CBZ Holdings Limited’s non-performing loans surged 27 percent to $127 million in the third quarter to September this year from $100 million recorded in the same period last year.

This comes as financial institutions operations continue to stagger in the unsettled economic environment characterised by a myriad of economic challenges leading to deprived business that propel non-performing loans.

Generally, the business environment has been constrained this year stemming mainly from macro-economic environment in which varied policy pronouncements were instituted to proffer solutions to perennial currency problem in the country.

Furthermore, in the period under review the number of policies declined by 6,2 percent to 115 600 subscribers by September 2019 compared to 123 200 in the same period last year mainly attributed to declining disposable incomes. According to CBZ, the operating environment was characterised by severe headwinds including growing operating expenditure and high inflation.

“Operating environment dynamics saw operations being affected by foreign currency shortages, rising opex driven by price indexation, inflationary pressures, waning consumer demand and upward review on fuel and electricity.

“The period also saw the number of policies declining by 6,2 percent to 115 600 subscribers in September 2019 from 123 200 subscribers same period last year owing to declining disposable incomes,” said CBZ in the third quarter trading update.

However, the period under review saw a number of active CBZ bank accounts increasing by 2 percent to 221 300 from 217 600 as the group continues with its innovation drive .

Correspondingly, total deposits increased by 75,2 percent to close the period under review at $3,6 billion from $2,0 billion last year.

Value of transactions by the bank increased by 86 percent to $62,7 billion from $33,7 billion realised in September 2018.

Profit after tax for the period jumped by 1241 percent to close the period at $631,2 million from $47,1 million in the prior comparable period as total income recorded a solid $1 billion from $146,2 million translating to a 587,4 percent in the positive.

Loans to deposits ratio declined to 26,1 percent from 28,8 percent in December 2018 while capital adequacy closed the period under review at 58,6 percent. The Herald