adminthe going market price at the time of repurchase, said the company.
Shares of CBZ closed at US13,5c in ZSE trading yesterday. Over the past 52 weeks, the stock traded in the US6c and US17c range.
“The CBZ buyback is also for Treasury purposes,” said Mr Kudzi Sharara, an investment analyst with Lynton Edwards Securities in an interview.
“It is like an investment. Those shares can in future be offered to a new strategic partner or sold to raise funds for acquisition.”
Buybacks reduce a firm’s share float. They tend to push higher the price due to firmer demand, as an artificial shortage is created.
CBZ, Zimbabwe’s largest banking group, sits on piles of cash. For the current year, it is paying US$1,7 million in dividends after reporting net earnings climbed 61 percent to US$30,3 million in the year to December 2012 from US$18,8 million a year earlier.
In a trading update for the first quarter ended March 2013, the management reported a solid capitalisation at US$132,5 million.
Total income grew 22,4 percent year on year to US$37,2 million from US$30,4 million. Underwriting income recorded an extraordinary growth of 240 percent while net earnings rose 12 percent to US$10,3 million. Funds under the management grew by 41,4 percent to US$123,6 million from US$87,4 million a year ago.
The group’s loan-to-deposit ratio increased by 6,1 percent to 88,9 percent, liquidity ratio rose 6 percent to 38,1 percent and cost-to-income ratio shrunk 0,9 percent to 57 percent.
The balance sheet is expected to grow by 19,5 percent, driven by a 20 percent and a 8,3 percent growth in deposits and advances, respectively. The increase in the lines of credit is expected to propel deposits growth and improve liquidity.
“As the largest bank in the country, CBZ has benefited, and is likely to continue to benefit from its balance sheet size,” said Imara Edwards Securities yesterday.
Online Reporter