CBZ FY14 net profit falls 10 percent, to focus on non-interest income

CBZ FY14 net profit falls 10 percent, to focus on non-interest income

HARARE, February 25 (The Source) – CBZ Holdings’  profit after tax for the full year to December slipped by 10 percent to $33 million from $37 million in the prior year, weighed down by rising operating expenses and higher interest charges.

Net interest income stood at $88,3 million after interest expenses rose 24 percent to $101 million. Non-interest income grew to $58 million from $48,1 million.

Operating expenditure increased to $98, 6 million from $88, 8 million in the prior year.

Chief executive Never Nyemudzo said the company would focus on non-interest income to drive  growth.

“We are trying to move away from credit risk as the backbone of our earnings to promote transactional banking,” he told an analysts briefing.

“We will be moving in the direction of agency banking as well as tech driven products that will facilitate easy accessibility of our products and also promote more transactions and generate non interest based earnings.”

Non-performing loans were higher at 7.39 percent from 6.1 percent at the beginning of the year.

Nyemudzo also said the group was looking revising its interest rates in line with the central bank’s request to make borrowings more affordable.

“Our view generally is that lending is a game of numbers. We have the right size at $1,4 billion (in deposits) therefore the issue of margins then falls away,” said Nyemudzo.

“We are reviewing our figures and once we see them favorable then we can start to support that initiative.”

Deposits at the country’s largest financial group grew at a slower rate of 6.3 percent compared to 29.1 percent last year to $1,4 billion.

Basic earnings per share fell 11 percent to 5,3 cents while return on equity dropped to 15.1 percent from 20 percent in the previous year, the group reported on Wednesday.

Chairman Richard Wilde said the group had total dividend of $2,65 million.