HARARE- One of Zimbabwe largest banks CABS, recorded a loan book growth in the 12 months period to December, despite a challenging economic climate in Zimbabwe.

CABS is the largest of Zimbabwe’s 4 building societies while overall ranking among the top 3 banks by balance sheet size in a sector with a total of 18 banks.

In its financials for the year ended December 2018, Old Mutual Limited said the growth in CABS’s loan book was as a result of an increase in new business and personal loans as the business continue growing in lower risks markets.

The growth in CABS lending activities helped drive Old Mutual Limited’s loans and advances up by 38% over the prior comparable period.

CABS is a subsidiary of Old Mutual Zimbabwe, which in turn is a subsidiary of Old Mutual limited, headquartered in SA and primary listed on the JSE. Old Mutual Limited is secondary listed on the ZSE among other Africa bourses.

CABS has registered a year on year growth in loans over the past 5 years to achieve a more than doubling of its loan book from $331 million in 2013 to $668.8 million in 2017. The bank’s CAGR in loans and advances over the same period sits at 16%.

Between December 2018 and June 2019 alone CABS loans grew by 14% which in turn helped drive interest income.  Loans to individuals accounted for 22% of total loans while loans to housing and commercial sectors accounted for 32% and 46% respectively.

The broader sector has experienced a mild growth in loans as alternative assets allure increased in light of repayment default risk. Banks have over the last 4 years tended towards fixed income securities notably government’s Treasury Bills which they deemed risk free and generating a annual interest of 10% plus a discount in the secondary market.

Bankers slowed down on private sector lending in light of weakening interest rates, growing risks of default as the economy became volatile and yields of alternative assets improved over the former.