By Staff Reporter
HARARE – After tax profit for ZB Financial Holdings (ZBFH) declined 45% to ZW$1.06 billion for the year ended 2020, the company has revealed.
The decline, from ZW$1.93 billion recorded in 2019, was attributed to a slump in topline but the group said it will proceed with cautious optimism in the short to medium term.
In 2020, the group’s total income fell by 9% from ZW$3.65 billion in 2019 to ZW$3.32 billion. Revenue performance was mainly underpinned by an 87% decline in fair value adjustments from ZW$1.03 billion in 2019 to ZW$0.13 billion in 2020.
Banking commissions and fees also fell in real terms by 8%, from ZW$1.24 billion in 2019 to ZW$1.14 billion in 2020, as inflation continued to outpace rate adjustments for commissions and fees.
“The subdued revenue performance in 2020 was mainly due to the combined effects of low-cost absorption as performance of most economic sectors receded,” said Fanuel Kapanje, ZBFH acting chief executive.
“This was compounded by the freeze on banking fees by the authorities which was necessary to ameliorate the effects of Covid-19 on industry and the general public.”
Net interest income increased by 0.34%, from ZW$0.65 billion in 2019 to ZW$0.66 billion in 2020. Loan impairment charges to the income statement went down from ZW$0.33 billion in 2019 to ZW$0.28 billion in 2020.
Overall credit quality continued to improve, with non-performing loans as a percentage of total loans reducing from 2% in 2019 to 0.7% in 2020. Net insurance related earnings declined from ZW$0.4 billion in 2019 to a loss of ZW$0.002 billion in 2020.
“This was influenced by a 58% increase in insurance related expenses which grew faster than the growth in gross premiums,” He said.
Gross premiums rose 2% from ZW$1.12 billion in 2019 to ZW$1.14 billion in 2020, whilst the related expenses increased from ZW$0.72 billion in 2019 to ZW$1.14 billion in 2020.
Operating costs were up 25% from ZW$2.22 billion in 2019 to ZW$2.78 billion in 2020, largely influenced by a catch-up adjustment on the cost base in tandem with the inflation profile over the past 2 years.
It declared a dividend of ZW74.13 cents per share .
By Staff Reporter