ZIMBABWE’S central bank has slapped one of the country’s largest commercial banks with a ZW$2 million fine after it failed to publish its year-end financials within the stipulated period.
Rising inflation and the volatility of the Zimbabwe dollar have stood out as some of the key issues which arose during the reporting period, with several companies announcing that they were coming up with strategies to ensure their balance sheets remain strong.
CBZ Bank, the flagship unit of financial giant CBZ Holdings, is listed on the Zimbabwe Stock Exchange (ZSE) and is required to timeously publish its financial performance to shareholders.
As reported by The NewsHawks earlier, ahead of the 31 March deadline to publish financial results for the period ending 31 December, a handful of companies wrote to the ZSE seeking an extension citing technical challenges relating to the country’s currency and inflation dynamics.
The local bourse extended the deadline by another month but, again, several listed firms continued to raise the red flag, saying they would miss the new deadline.
According notes attached to the latest CBZH financials, the group was found on the wrong side of the rules by the country’s apex bank which regulates the financial system.
The group’s inflation-adjusted after-tax profit for the full year to 31 December rose to ZW$9.4 billion from ZW$8.8 billion on improved interest income.
“During the year, CBZ Bank was fined ZW$1 820 000 and ZW$ 70000 by the Reserve Bank of Zimbabwe (RBZ) for publishing its Interim Financial Statements after the set statutory deadline of 31 August 2021 and for breaching section 18 (3) of the Banking Act, respectively,” read the notes attached CBZH financial statement.
Justin Bgoni, ZSE chief executive, then said the bourse made the decision due to an overwhelming request for extension of compliance by issuers to submit year-end financial statements.
“The ZSE has made the following decision that Issuers: whose half-year or full-year financial period ended on 31 December 2021 and are due for publication by 31 March 2022 are hereby granted a 30-day compliance grace period to 30 April 2022,” Bgoni said.
“This will allow Issuers to complete their audit processes and finalise financial statements and reports. (Issuers/listed companies) who fail to meet the 30 April 2022 deadline will be penalised for non-compliance.”
Already, independent auditors have expressed concern over some publicly listed companies which failed to comply with International Financial Reporting Standards as the currency conundrum continues dogging the economy. The auditors noted that some of the financials which were published failed to comply with International Accounting Standard 29 which relates to reporting on hyperinflation and IAS 21 which gives guidance relating to the effects of changes in foreign exchange rates in volatile markets like Zimbabwe.
In 2019, the Public Accountants and Auditors Board, which is mandated with regulating the auditing and accounting standards in the, country said Zimbabwe had officially become a hyperinflationary economy.
Zimbabwe first experienced hyperinflation from around 2005 till 2008, peaking in 2008 at 500 billion percent. The US$1 became equivalent to ZW$2 621 984 228. The domestic currency was ultimately ditched in favour of a multi-currency system dominated by the US dollar.