HARARE, August 26 (The Source) – Diversified financial services group ZB Holdings has bounced back into the black with a net profit of $4,1 million in the six months to June 2015 from a loss of $2,5 million over the corresponding period last year despite a fall in revenue.
Ron Mutandagayi, the ZB chief executive, told analysts on Wednesday that the performance was achieved through a ‘relentless’ implementation of cost management.
“Total revenue reduced by an aggregate two percent, saddled by a 35 percent reduction in revenue from lending activities which was partially offset by improved outturn in reinsurance operations, life assurance operations and commissions and other income which performed better by 36 percent, 20 percent and 7 percent respectively as compared to 30 June 2014,” he said.
Mutandagayi noted that the $2,2 million reduction in income from lending activities was posted after prudential interest reservation of an amount of $9,9 million which would otherwise have formed part of revenue.
He added that part of this revenue would be booked in the future through loan recoveries.
“The underlying loan assets amounted to $132,5 million having reduced by nine percent from $146,2 million as at 31 December, 2014 as a result of the combination of loan settlements and reduced credit creation,” he said.
The group maintained a conservative loans-to-deposits ratio of 59 percent, in line with the volatile nature of the deposit base.
Mutandagayi said $20 million in new capital – an interest free loan from one of its major shareholders – helped strengthen the bank’s underwriting capacity while reinforcing regulatory compliance.
“Despite some short-term transformational challenges related to the business model review and staff rationalisation exercise which started during the last quarter of 2014, significant progress has been made in stabilising the Group’s operations,” Mutandagayi said.
“Improved operational efficiency anchored on a growth oriented leadership culture will put the Group in good stead to navigate the currently obtaining economic challenges whilst taking full advantage of short-term opportunities.”
The group did not declare an interim dividend.