CBZ seeks US$300m

investment conference in Harare last week, the bank’s chief finance officer, Mr Never Nyemudzo, said negotiations with financiers had reached closing stages.
“We are in the process of securing US$300 million for property developments in the CBD and to finance mortgages,” he said.
“Negotiations with financiers have reached an advanced stage.,”
CBZ Bank, the biggest bank in the country, controls 28,3 percent of the market share. The bank is also looking for an additional US$100 million offshore for low-cost houses.
The funding is expected to push the average mortgage life size from the current levels of five to between 10 and 15 years.
Interest rates on mortgages at CBZ attract 14 percent when the bank is out-laying cash and 16 percent when buying the property from CBZ. Houses are ranging in price between US$10 000 and US$100 000.
Mortgage-lending business had collapsed during the 10-year period of hyperinflation. Lenders resumed offering mortgages only in 2009, after the adoption of the multi-currency system.
Mr Nyemudzo said the group was saving approximately 35 percent of combined group operating expenditure, following the rationalisation of the bank and building society – with the majority of the cost savings to flow through in the full year ending 2011.
The group is targeting a cost-to-income ratio of between 55 and 60 percent for the full year, while the long-term target is 50 percent.
In 2009, CBZ Holdings concentrated on diversifying and improving its fee income streams.
The group views insurance products as an area of significant future growth.
In the first half of the year, the group launched a life insurance operation. An analysis of CBZ Holdings by Imara indicates that the group’s ability to cross sell non-banking products to its large customer base will also improve future profitability.
Mr Nyemudzo said retail as a percentage of total loans has steadily increased from about 6 percent in 2009 to about 11 percent as of December last year, driven by growth in housing and personal loans.
The bank has also identified opportunities in the small to medium enterprises and microfinance. It has targeted this to constitute approximately 3 percent of the total book in the full year to December.
For the year ended December last year, CBZ Holdings saw profit after tax growing by 115 percent to US$17,6 million. Growth in profitability was driven mainly by a significant increase in non-funded income.
The group had the largest depositor base in the country at over US$600 million and an advance book of US$444,6 million, controlling 22 percent of total systems assets, 28 percent of deposits and 31 percent of advances.
Government transactions contributed 16 percent to CBZ business and the bank only advanced about 3 percent in loans to Government.