Zim Diaspora

Aug 19th
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CBZ first-half earnings rise 34 percent

By Reuters

Zimbabwe's largest banking group CBZ Holdings' earnings jumped 34 percent in the first half of the year, as higher interest income helped it offset the dollar crunch and sluggish economic growth the country is facing.

The southern African country has been forced to sharply cut its 2012 GDP growth forecast to 5.6 percent from the 9.4 percent seen earlier, citing a poor agriculture season, lack of donor funding and policy inconsistencies.

Zimbabwe, which abandoned its inflation-ravaged currency in 2009 to adopt foreign currencies, mainly the US dollar, has been battling a dollar shortage and was earlier this year forced to draw down $110 million from a 2009 IMF fund in a bid to ease the liquidity crunch.

CBZ said basic earnings per share were 2.92 cents in the half-year, compared to 2.18 cents previously. Profit after tax was $18.3 million in the six months to June 2012, up from $13.7 million in the same period last year.

CBZ's huge base of cash-rich depositors and offshore lines of credit have been enabling the banking group to lend aggressively and boost interest income.

CBZ chief executive John Mangudya said the group had however curtailed lending during the first half, in a bid to manage risks associated with the weak economy and tight liquidity.

Total loans stood at $789.8 million at the end of the first half, a marginal change from $790 million for the whole of last year.

Mangudya said non-perfoming loans had come down to $44.7 million in the first half of this year, from $48 million at the close of 2011.

The group's total deposits rose to $985.7 million by June 2012, up from $814.7 million in the same period of 2011.

The group's assets rose to $1.174 billion by June, up from $954 billion in 2011. CBZ is the only Zimbabwean banking group with $1 billion in assets.

CBZ, which has commercial banking, mortgage lending, asset management and insurance units, said it already meets the new capital requirements imposed by the central bank last month, under which banks need to put up to $100 million in minimum capital by June 2014. (Reporting by Nelson Banya; Editing by Helen Massy-Beresford)