Harare - CBZ Holding Limited has emerged as the most profitable bank in Zimbabwe after doubling its profit in the first half of the year that ended on June 30 2018.

The Bank relied on the sheer size of its balance sheet, large depositor base, strategy to recover debt and sweat its asset base, to claim top spot.

According to Equity Axis analysts, these results are a clear testimony of the reinvigoration and restructuring exercise the bank went through since the last quarter of 2018.

“The conservative approach in lending, the robust loan recoveries and the prudency in provisioning are indicators of a shift in strategy at the biggest bank by asset size and now by profit size as well.

“The TBs holding now at a record $1 billion, indicates the need by the bank to sweat its assets base so as to generate a return for shareholders in an environment where risk associated with loans is still high.

“This figure however equates to 20 percent of the total TBs estimated to have been issued to date and circa 55% of the bank’s earning assets, clearly a huge exposure for the bank,” said Equity Axis in its latest report.

Leveraging on its sheer balance sheet size, CBZ reported a 51percent growth in operating income from $48 million to $73 million in the period under review.

To date this is the strongest operating performance posted by the bank, which is the sector’s largest by balance sheet, has ever achieved.

Driving the operating performance was a sustained growth in fee and commission income which was underpinned by a significant growth in transactions in line with market trends and the group’s digital strategy.

In the period, the bank’s total number of accounts grew by 22 percent to 496,000 while additional Point of Sale machines were added bringing the total to 8145 from 5702 at the end of the first half of 2017.

Net interest income, which is income from lending activities rose 6 percent to $34.5 million benefitting from lower interest expenses.

The bank undertook to significantly trim its loan book maintaining what appears to be a deliberate strategy to manage its loan book.

Other income came in at $7.9 million which is a sharp growth from $1.8 million in the prior year largely impacted by a surge in recoveries and property sales.

The bank’s cost base came off by 3 percent to $37.1 million dragged by a decline in staff costs other costs however grew against the prior year impacted by a surge in depreciation costs.

Consequent to the surge in operating performance after tax profit came in at $32 million which was a growth of 219 percent on the prior comparable period and the highest since 2009.

This overall growth was achieved on the back of quicker growth income largely driven by expansion of transactional business.

The bank now leads in terms of profitability across the sector, overtaking tax exempted CABS and Stanbic who previously held top positions for a very long time.

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