ZB full year revenue jumps on improved lending activities

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    Harare – ZB Financial Holdings has reported a 21 percent jump in net revenue for the full year ended 31 December 2018 underpinned by improved performances in net income form lending activities, net insurance premium income as well as fair value credits on the investments portfolio.

    The financial services giant recorded $83.5 million in revenue, up from $69 million in the same period a year earlier.

    Net income from lending and trading activities recorded a 29.1 improvement, from $14.8 million in 2017 to $19.1 million in 2018.

    Chief Executive Ron Mutandagayi in statement accompanying the financials said “this was on the back of a 23.2% rise in interest and related income from $24.8 million in 2017 to $30.6 million in 2018 driven by a 31% growth in earnings assets constituting the loan book and the trading book as the Group capitalised on liquidity glut in the early part of the year.”

    Despite a myriad of challenges ranging from foreign currency shortages prevalent in the economy to currency devaluation and a general multi-tier pricing system, the Group posted a nominal growth, achieving a profit of $21.8 million in the review period against a restated profit of $14.2 million in 2017.

    Gross insurance premiums increased by 6 percent   to $32.8 million during the period under review from $30.8 million in 2017, largely driven by a 17 percent growth in life assurance premiums, underpinned by a buoyant new business run in the first half of the year.

    The Group’s reinsurance premiums, however remained flat over the two years representing inherent cost challenges faced both at business and household level.

    “On aggregate, net results from the insurance activities increased by 3% from $9.6 million in 2017 to $9.9 million in 2018,” said Mutandagayi.

    The Group’s total assets increased to $663.2 million from $525.7 million in 2017 underpinned by growth in money market investments, investment securities, mortgages and other advances, and sovereign paper holdings.

    Deposits increased by 24.8 percent to $4333 million from $347.1 million previously.

    Additionally, the Group maintained aggregate liquidity ratio above 79 percent, providing a substantial cushion against the regulatory minimum ratio of 30 percent.

    Total equity increased by 20.7 percent to $120 million from $99.8 million in 2017.

    Mutandagayi said the increase was driven by the profit outturn for the year of $21.8 million, net other comprehensive income movements of $4.2 million and a deduction for the prior year dividend amounting to $2.9 million.

    “Going forward, strengthening the overall level and quality of equity in the Group will be a key priority area,” he said.

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