ZB FINANCIAL Holdings recorded an inflation adjusted net profit of $785 million for the six months to June 30, a 66,2 percent decline from $2,32 billion achieved in the prior year due to increases in operating costs which increased by 73,5 percent during the period under review.
In a statement accompanying the financial institution’s results, for the half year to June 30, Shepherd Fungura the group chief executive said ZB Financial Holdings recorded a 29,8 percent decline in total income from $4,1 billion for the period to June 30 2020 to $2,9 billion during the period under review.
“The decline in revenue performance was mainly underpinned by a 67 percent decline in fair value credits from $1,6 billion in 2020 to $519 billion in 2021 and an 80 percent decline in other operating income from $1,7 billion in 2020 to $336 billion in 2021,” he said.
Net interest income rose by 148,6 percent from $366 billion in 2020 to $909 billion in 2021, whilst banking commissions and fees also rose in real terms by 115,6 percent from $533 billion to $1,2 billion during the period under review. Loan impairment charges to the income statement increased from $164 billion to $256 billion.
“Net insurance related earnings rose from $116 billion to $239 billion, on the back of a favourable claims experience. Gross premiums increased by 18,4 percent from $592 billion to $701 billion, whilst there was a 3,1 percent decrease in insurance related expenses from $477 billion to $462 billion during the same period,” Fungura said.
Operating costs increased by 73,5 percent from $1,9 billion to $2,04 billion largely as a result of the catch-up adjustment on the cost base in tandem with the inflation profile. The cost to income ratio improved from 84 percent to 71 percent.
“The group continues to monitor the sustainability of its operations, especially in light of continued upward pressure in the cost base exerted by the inflationary environment,” he said,
Profit from ordinary activities declined by 71,2 percent from $2,94 billion in 2021 to $849 billion in 2021. During the period under review an increased transfer of the life fund of $226 million, compared $28 million was made, underpinned by sustained strong performance of the underlying assets.
The group earned 357 million as its share of profits reported by its associate companies for 2021, compared to a loss of $234 million in 2020. The share of profits from associates continues to be driven mainly by the revaluation of investment properties which constitute the bulk of the assets as a significant listed investee entity.
“The group’s total assets increased by 25,4 percent in real terms, from $22,9 billion as at 31 December 2020 to $28,7 billion as at 30 June 2021,” Fungura said.
Deposits and other related funding account balance grew by 45,8 percent from $8,57 billion at 31 December to $12,5 million as at June 30 2021.
“The group maintained a comfortable liquidity margin of safety, with the ratio of liquid assets to customer deposits being 65,4 percent as at June 30 2021, down from 78,9 percent reported on December 31 last year. This compares favourably against a regulatory benchmark of 30 percent,” he said.
The group’s total equity increased by 8,3 percent from $9,7 billion as at 31 December 2020 to $10,5 billion as at 30 June, driven mainly by the positive performance of 30 percent.