ZB Financial Holdings Limited has recorded a 75% increase in total income ZW$70.542 billion for the year ended 31 December 2022, from ZW$40.343 billion in the prior year.
Presenting the group financial statements, chief executive officer Shepherd Fungura attributed the growth to the increase in trading income and fair value credits.
“This positive outturn was achieved on the back of significant rise in trading income and fair value credits,” said Fungura.
Trading income, at ZW$22.237 billion, is a 394% uptick from ZW$4.5 billion in 2021, while fair value adjustments moved from ZW$12.195bn in 2021 to ZW$15.492bn, because of higher fair value gains from investment properties.
Also contributing to the total income were the group’s commissions and fees that moved up 38% from ZW$11.570 billion in 2021 to ZW$15.910 billion in the period under review.
“The improvement in commissions was supported by growth in both number of customers and volume of transactions as a result of the group’s Organisational Transformation Programme journey,” said the CEO.
Net interest income improved by 77%, from ZW$11.359 billion in 2021 to ZW$20.050 billion in 2022 due to the reinforcement of the growth in loans and advances book. Gross loan impairment charges to the income statement grew by 229%, from ZW$2.136 billion in 2021 to ZW$7.035 billion in 2022. As a result, net income from lending activities registered 41% growth, from
ZW$9.224 billion in 2021 to ZW$13.015 billion in the year under review.
However, the 2022 inflation rates effects increased operating costs from ZW$27.925 billion in 2021 to ZW$40.708 billion in 2022.
Annual inflation remained high during the year under review, rising from 60.6 percent in January 2022 to 243.75 percent in December 2022.
Despite that, the group registered 391% percent growth in net profit, from ZW$7.074 billion attained in 2021 to ZW$34.715 billion in 2022 while total assets increased by 85% in real terms, to close the year 2022 at ZW$320.964 billion.
Fungura said the group assumed a rebalance of the asset mix during the year through the acquisition of Mashonaland Holdings, which saw a 516% increase in investment properties.
“During the year, the group acquired additional equity interest in Mashonaland Holdings Limited (Mash) and achieved a shareholding of above 50 percent, granting it control of Mash and subsequently became a subsidiary of the Group with effective 31 December 2022,” he said.
Deposits and other related funding account balances grew to ZW$109.210 billion as at 31 December 2022 from ZW$67.616 billion as at 31 December 2021.
The group maintained a comfortable liquidity margin of safety, with the ratio of liquid assets to customer deposits being above two times higher at 60% throughout the year against a prescribed ratio of 30%.
The group’s total equity also increased by 114%, from ZW$69.189 billion in the preceding year to ZW$148.370 billion as at 31 December 2022.
Fungura said this growth was underpinned by the positive performance outturn for the year, as well as gains on the revaluation of properties and equipment.
Going forward, ZB Financial Holdings said it was working on combining all group companies to reduce the expense of having to conform to the prescribed capital requirements of each firm.
“The group is still working to consolidate all its banking operations under one licence, merging ZB Bank Limited, ZB Building Society and Intermarket Banking Corporation,” said the group.
In February last year, the Reserve Bank of Zimbabwe set US$30 million as the minimum capital requirement for banks to reduce the probability of default by financial institutions and to ensure that withdrawals can always be made.