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Oliver Kazunga Acting Business Editor
Zimbabwe Stock Exchange-listed ZB Financial Holdings (ZBFH) anticipates to record a loss in the year ending December 31, 2014 on the back of cost reduction measures the group has undertaken.
Last year, the diversified financial services company posted a marginal $0,9 million profit. In a notice, the group said shareholders of the company and potential investors were advised to exercise caution when dealing in its shares.
“The board of directors of ZBFH wishes to inform the shareholders and potential investors that the company is expected to record a loss in the year ending December 31, 2014. The measures undertaken by the group have resulted in it incurring costs above the norm, in running the business.
However, all the costs are of a once-off and non-recurrent nature, it said.
In 2014, ZBFH said it embarked on a review of its business model with the objective of exiting non-core business areas that were not profitable.
The review has now been completed.
“The board decided to wind down the stockbroking arm, ZB Securities and the asset management unit, ZB Asset Management. Both entities were underperforming, and were to a large extent, subsidised by the other units of the group.
The disposal of these two units has resulted in savings on expenditure related to staff, occupation, and regulatory requirements. The winding down of the two entities is almost complete,” said ZBFH.
During the course of the year, the group said it began outsourcing security and cleaning services. The group’s banking unit, ZB Bank, hasn’t been spared from the scourge of non-performing loans.
“The bank decided to clean up the bank’s loan book during the year. This clean-up process has resulted in an increase in the provisioning figure for the bank’s non-performing loans. The outcome is that the bank’s income statement and consequently the group’s profit and loss account to a big dent this year,” it said.
The group has realigned its business to match the prevailing economic realities and the exercise was almost complete and was expected to yield significant reductions in costs.
“As a consequence, the group embarked on a staff resizing exercise in 2014.”
Online Reporter