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Business Reporter
CENTRAL African Building Society has remained firmly on a solid growth path after net surplus in the interim to June 2013 rose 11 percent to US$10,6 million driven by increases in both interest and non-interest income. “Net interest income increased by 29 percent in line with the increase in loans and advances. Net interest and non-interest income contributed 56 percent to the society’s total income. Fee and commission income increased by 13 percent as a result of increased volume of transactions,” said CABS.
Notably, fees and commissions were trending up in the interim contrary to other financial institutions that registered a decline in profitability in the interim period citing the central bank memorandum of understanding on charges.
The central bank last year signed an MoU with all banks for a cap on interest and charges after a public outcry about cost of banking and funding.
CABS said surplus in the interim period registered modest growth despite operating cost increasing by 33 percent due to the impact of various growth initiatives.
Total assets, CABS said, increased by 18 percent to 474,3 million during the six months period under review largely driven by a 21 percent growth in the deposit base to US$83 million made up of 10-year mortgages for housing.
The society’s loans and advances position increased from US$278 million in December 31 2012 to US$268 million with the mortgage book rising from US$96 million to US$104 million in the six months period under review.
CABS said an additional branch was opened during the interim while additional mobile banking agents were rolled out to make banking more accessible.
Texta cash mobile remittance product exceeded revenue and usage targets while point of sale acquisition through ZimSwitch reached 73 percent of market share.
CABS said the Reserve Bank of Zimbabwe requires building societies ro maintain minimum capital of US$40 million (June 30 2012) and capital adequacy of 12 percent as measured by the ratio of total capital to risk weighted assets.
In the regard, the society said it has a policy to maintain strong capital base so as to maintain confidence and sustain future development of the business.
As such, CABS said its capital position as at June 30 2013 comprised US$56,8 million tier 1, US$31,2 million tier 2 and US$5 million tier 3 capital.
In view of this capital position CABS said capital adequacy stood at 17 percent in December 2012, 13 percent in June 2012 and 21 percent in June 2013.
Looking at the operating environment CABS said economic stability continued into 2013 with growth seen at 3,4 percent and inflation projected at 5 percent by the end of the 12 months period to December 2013.
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