CBZ profits surge to US$30m

from US$81,5 million recorded during the comparable year.
The strong financial performance saw earnings per share for the group increasing to US4,83c from         US2,99c recorded during the same period the previous year.
CBZ Holdings yesterday traded at US5c against an EPS of US4,83c. This means that CBZ share price still has room to trade northwards.
It is also an indication that most stocks on the Zimbabwe Stock Exchange are still undervalued and when the market re-corrects more stocks are expected to appreciate.
CBZ stocks opened the year at US14c and rose to US19,5c in April. The counter traded lower reaching US7,29c on December before closing the year at US14c. The group’s market capitalisation closed the year at US$95,8 million.
During the period under review the group’s charge for impairments were at US$14,4 million against tight liquidity conditions on the market.
Analysts expected write-off for most banks to be high on the back of high levels of default, thereby affecting profits.
However, indications are that most banks had quality clients who have the potential to repay, despite defaulting.
Commenting on the results, group chairman Mr Luxon Zembe said CBZ Bank was affected by “hot money” caused by high value withdrawal transactions that were effected on behalf of the bank’s clients when there was no lender of the last resort or interbank market.
The entire banking sector was hit by serious liquidity shortages in mid-December into 2012 resulting in delays on payments, as well as larger than normal loans to deposit ration.
“The group’s banking unit, which is the largest in the sector, was not spared by this predicament,” said Mr Zembe.
He added that the group had secured about US$120 million for lines of credit to reinforce the bank’s liquidity position to avoid the previous crisis.  
During the period under review, the banking group recorded a 43,5 percent growth in deposits to US$829,9 million from US$578 million recorded in 2010.
Most of the deposits came from the services sector and financial organisations, contributing US$160,7 million and US$159,9 million respectively.