ZB Financial Holdings’ after-tax profit for the half year to June increased 375 percent to $1 billion largely driven by non-funded income which grossed $1,8 billion.
During the interim period, the group’s total income amounted to $2 billion.
The improved profitability resulted in earnings per share increasing by 239 percent to $607 cents compared to $179 cents during the same period last year.
In a statement accompanying financial results, Ronald Mutandagayi, the group’s chief executive officer, said gross interest income regressed by 21 percent in real terms against a moderate re-pricing on a reduced portfolio of assets.
“Interest expenses reduced with paying rates having remained flat whilst the funding mix shifted to less expensive classes,” he said.
Net assurance income reduced by 58 percent, saddled by a 56 percent decrease in gross premiums which was partially offset by a 53 percent decrease in policy benefits, reassurance premiums and business mobilisation commission expenses.
Mutandagayi said during the period, policy surrenders increased by 223 percent as household income levels deteriorated due to an increase in inflation and national lockdown.
On the group’s reinsurance unit, ZB Reinsurance regional ambitions, Mutandagayi said the deal had been delayed by the Covid-19- induced slowdowns, but the initiative was now at an advanced stage.
During the period, the reinsurance unit saw foreign sourced premiums up to 6,8 percent 3,3 percent same period last year as the reinsurance company maintained strong relations with regional partners on the back of a solid reputation and credit rating.
Mutandagayi said growth in reinsurance premiums was also driven by the movement in exchange rates.
“The insurance claims ratio softened to 24 percent during the period compared to 49 percent in the half year of 2019 with the improvement being partially explained by the general slow-down of business and social activity as a result of the Covid-19 lockdown while the technical expenses ratio remained at an acceptable level despite an increase from 78 percent to 87 percent.
On other hand, the group’s life business saw life assurance premiums affected by the reduction in household disposable incomes as inflation raged.
Mutandagayi noted that mortgage facilities have failed to find favour with property sellers due to the diminished value protection offered by the market.
However, the bank’s NPL ratio improved from 0,45 percent as at December 31, 2019 to 0,19 percent as at June 20.