CBZ reports $2,8 billion profit after tax, sets on asset expansion

Paul Nyakazeya

CBZ Holdings has announced plans to soon become the country’s leading financial institution in terms of assets and earnings after reporting a $2,8 billion profit after tax for the interim period to June 2006 from $236 million during the same period last year.<
The group announced that it had preserved enough money for acquisitions that would be made before the end of the year to complement existing activities.

Commenting on the group’s financial results, CBZ managing director, Nyasha Makuvise, said the solid performance
 in the period under review was supported by exceptional performance by subsidiary companies.

“We (CBZ Bank) are working to be on top by year-end. All our units had an excellent season and we are aiming to do even better by year-end,” Makuvise said during an analysts’ briefing.

Headline earnings per share during the period under review were $4 052 which is in line with market expectations of earnings ranging between $1 260 to $4 000.

The group’s balance sheet at $33 trillion represents growth of 636% and shareholders’ funds improved to $5 billion, an increase of 881% over the same period last year.

Net interest income for the group was $9,7 billion against $879 million recorded in June 2005.

“The banking unit recorded a profit after tax of $2,2 billion driven by an increase in net interest income of $3,3 billion and non-interest income of $993 million,” Makuvise said.

He said the bank also managed to keep its costs under check with the cost to income at 21% of which 44% represents staff costs.

The CBZ Asset Management unit, Datvest, outperformed the group’s other subsidiaries with $18,9 billion of funds under management during the reporting season.

Datvest managing director, Mike Van Blerk, said the asset management company now commanded a significant share of the market.

“We (Datvest) have enough funds to even apply for our own banking licence,” Van Blerk said.

The bank said it recouped the price it had paid for the asset manager within six months.  Datvest was bought in May last year.

Datvest recorded an after tax profit of $536 million compared to $27 million in June 2005.

The banking unit’s balance sheet grew by 625% to $32 billion from $4,4 billion in June 2005. Advances grew by a modest 360% due to weak economic activity while deposits increased by 485%. The CBZ currently commands a 19,3% of the banking market share.

“To strike a balance between shareholder expectations and growing the business the board is declaring an interim dividend of $585 (old currency).”

“We are preserving as much cash as we can as we have possible acquisitions on the cards,” said Makuvise.

There has been speculation in the market that the institution is courting Beverley Building Society in a bid to bring the society into its fold.

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