ZB income jumps 548pc

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Financial services provider, ZB Financial Holdings, says total income increased substantially in the second quarter of this year largely anchored by fair value credits and foreign exchange gains. In a trading update released by the group this week, managing director Ron Mutandagayi (pictured) said total income skipped 548 percent in the quarter to June 2020 and 2 955 percent against the same period last year. The group’s total income increased by 144 percent from $38,6 million achieved for the half year ended 30 June 2018 to $94,2 million for the six months up to 30 June 2019.

Loans and other advances grew by 164 percent in the half year to June compared to 2019. Letters of credit contributed 23 percent to total loans and other advances.

“Income growth is largely anchored on fair value credits and foreign currency exchange gains, collectively making up 89 percent of total revenue,” Mr Mutandagayi said.

The fair value of an asset is usually determined by the market and agreed upon by a willing buyer and seller, taking account of prevailing conditions and it can fluctuate often.

Similarly, foreign exchange gain/loss occurs when a person sells goods and services in a foreign currency. If the value of the currency increases after the conversion, the seller makes a foreign currency gain. The Zimbabwe dollar has lost considerable ground against the US dollar since its reintroduction at 2,5 to 1 in February last year, to 80,4 to 1 since Tuesday this week.

He said the group’s core business revenue growth continued to lag behind inflation movements but banking deposits increased by 107 percent in the half year compared to the same period last year.

“The group’s performance in quarter two has been satisfactory despite the adverse environmental factors. Financial results for the half year ended 30 June 2020 will be published on 28 August 2020 and a more detailed analysis of the financial performance will be provided then,” he said.

Mr Mutandagayi said the group enjoyed increased business relations during the first six months of the year with the aggregate number of accounts in the banking operations increasing by 9 percent.

This, he said, was a continuing trend from the prior year and creates a base for sustainable business operations in the future.

With an increased demand being placed on the group’s digital platforms out of the need to observe social distancing, the group has experienced only minimal disruptions in providing service to customers.

“Service experience has been enhanced with the recent commissioning of the group’s 24-hour Contact Centre,” Mr Mutandagayi said.

During quarter two, the group operated with a reduced complement of staff as a result of the need to de-congest its work spaces.

Client visits were also discouraged in order to observe social distancing. This operating model is expected to continue for as long as health risk factors remain amplified.

The group has implemented a remote working policy, which enables staff to work from home.

Mr Mutandagayi said ZB had now completed technical processes for the re-launch of the VISA International Debit card. Regulatory approval for the product has been granted and a formal product launch is imminent.

Further, a refreshed WhatsApp banking product with improved security features and functionality was rolled out in quarter two. Product uptake from clients has been satisfactory. The Diaspora banking product, developed with multiple partners, is in pre-launch stage, having been approved by the regulator in the second quarter, the ZB chief executive said.

Additionally, Mr Mutandagayi said the group’s international cash funeral plan has gone past the product development stage and now awaits approval by the regulator.

In the outlook, he said the economy is expected to remain fragile with Covid-19 ushering in a new social order with widespread implications on the conduct of business.–herald.cl.zw

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