Multicurrency extension ensures policy clarity:CBZ

Financial services group CBZ Holdings says the extension of the multi-currency system to 2030 has provided much-needed policy clarity and consistency, enabling the group to underwrite long-term products.

The group operates the largest bank in the country, CBZ Bank, in terms of assets and deposits.

Zimbabwe adopted a multicurrency regime, which was dominated by the US dollar in 2009, at the height of hyperinflation in the country.

In October last year, the Government gazetted Statutory Instrument (SI) 218 of 2023, which extended the use of the multiple currency system to December 2030, which has gone a long way in putting to rest the anxiety by businesses and potential investors over the currency regime.

Pension funds and other stakeholders were no longer willing to commit to long-term funding arrangements as they were unsure about the implications of a monetary regime that had been scheduled to run until 2025.

The extension assured financial institutions and guaranteed them leeway to provide long-term loans, which are critical for business growth.

This means up to 2030, registered lenders, banks, or any financial institution that lends foreign currency would receive repayment of the loan or credit in that foreign currency.

Group chairman, Mr Luxon Zembe, said the group would continue to leverage its strong investment in intellectual, manufactured and financial capital to continuously develop and offer solutions that satisfy the needs of its wide range of clients.

“These included, among others, enhancement of products and mobilisation of external lines of credit to better meet the loan requirements of industry,” he said, commenting on the group’s 2023 financials.

In 2023, the Government and monetary authorities, to address market volatility, introduced several monetary and fiscal measures, among them the enhancement of the tight monetary policy stance and the standardisation of export retentions.

In April of this year, the group made key board and management appointments as part of efforts to consolidate and drive its key acquisition investments.

Mr Lawrence Nyazema was appointed Group chief executive officer effective April 19, 2024, having occupied the position in an acting capacity since December 1, 2023.

The appointment followed that of Mr Zembe, who was appointed the group’s board chairman effective April 14, 2024.

The appointments are designed to drive the strategic vision of creating one of the country’s largest financial services groups through the superintendence of the merger of CBZ with ZB Financial Holdings.

In another transaction, CBZ Holdings merged with First Mutual Holdings Limited (FMHL) after the group acquired a 36 percent stake in the insurance services in line with its growth strategy.

The FMHL business model presents a natural fit between FMHL and CBZHL as it brings to the group a giant leap into the insurance space.

Post-merger, it is believed the group will have five major divisions: banking, insurance, investment, property, and agriculture.

However, during the year under review, the bank’s total advances grew 145 percent to $2,072 trillion, up from $846.7 billion in 2022.

Deposits also grew 71 percent to $5,577 trillion from $3,2 trillion in the prior year.

During the period under review, non-interest income continued to dominate the bank’s revenues, reaching $1,8 trillion, while net interest income stood at $547,7 billion.

The group’s total income reached $2,3 trillion, up from $1,2 trillion. This resulted in an after-tax profit of $693,5 billion, increasing from $161,2 billion in the previous year. The group’s total assets increased 80 percent to $8,258 trillion.-herald