Source: Funding agricultural sector to boost CBZ Holdings revenue | Herald (Business)
Equities research firm, IH Securities, expects that financial Services group CBZ Holdings’ focus, going forward, to lean on the agricultural sector given the bank’s drive to support the Government initiatives in the sector.
This comes as the group’s agro-business constituted 51 percent of the group’s loan book during the half year period to June 30, 2022. IH said that of special concern lately is the unpredictable weather pattern perhaps explaining the growth in the bank’s provisions.
“With the recent upward review of the bank policy rate to 200 percent, we expect upward adjustments in lending rates in the second half leading to growth in interest income,” it said.
The group’s agro-business financing is mainly incorporated under the group subsidiary, Agro Yield, which plays a greater role in the agricultural sector, a strategically key sector that saw Zimbabwe for the first time becoming a net exporter of maize and wheat in the 2021 season.
According to IH Securities, the financial services group’s total income increased by 710 percent year on year from $11,41 billion in the first half of 2021 to $92,44 billion during the period under review mainly driven by revaluations on investment properties which were up 9,5 percent.
The research firm indicated that the group’s other driver of interest income will be growth in the foreign currency loan book. CBZ, according to its financials, said that measures by the government and the Central Bank to curb inflation and stabilize the economy will help keep the economic situation in check and provide the much needed relief.
Mr Marc Holtzman, the group chairman, said the stable economic environment will provide the financial institution with opportunities to actively participate in the economy.
“We remain optimistic that these steps will help keep the economic situation in check and provide the much needed relief,” he said.
Mr Holtzman said sectors such as mining and construction are expected to remain fairly strong and resilient, whilst recovery in the tourism and aviation sectors may be further catapulted by pent-up demand as tourists travel far and stay longer.
As a result, he said that the group will continue to closely monitor these developments in order to better meet the expectations of its customers, employees, shareholders and all stakeholders.
The local economy has been hinged on the government’s ability to continue to control money supply as well as insulate the economy against global supply and inflation shocks. Authorities have resolved to maintain a tight monetary policy stance in response to rising inflation and exchange rate instability. As a result, of late the country has witnessed relative stability in the foreign currency exchange rate.
However, during the interim period under review, the group posted a $17,5 billion inflation adjusted net profit after tax with the performance being a 147 percent rise from the 2021 comparative period figure of $7 billion.