ZB Q1 profit jumps 78pc to $968bn

ZB Holdings recorded a 78 percent growth in inflation-adjusted profit after tax for the first quarter to March 31, 2024 to $967,557 billion compared to the same period in 2023.

This was after the group’s inflation-adjusted total income soared by 120 percent to $2,347 trillion in the first quarter of 2024.

In a trading update, ZB said: “Inflation-adjusted total income increased by 120 percent from $1,065 trillion for the three months period up to March 31, 2023 to $2,347 trillion for the three months period to March 31, 2024.”

The impressive growth was primarily driven by a 214 percent increase in fair value credits and foreign exchange income, reflecting significant asset value adjustments in response to a dramatically changed operating environment.

Additionally, sustainable trading income rose by 53 percent, bolstered by a 69 percent increase in non-funded income.

“In the short to medium-term, generating sustainable earnings and cost-containment initiatives continues to be an imperative strategic goal,” the company said.

Despite the tight cost containment measures, inflation-adjusted total expenses increased by 30 percent, from $573,422 billion in the first quarter of 2023 to $745,622 billion in the same period in 2024.

ZB Holdings reiterated its commitment to generating sustainable earnings and enhancing cost efficiency in the short to medium term.

Inflation-adjusted assets saw modest growth of 2 percent, reaching $21,792 trillion as of March 31, 2024.

“This was mainly attributable to the tightening of monetary policy by monetary authorities, which also restricted deposits mobilisation and credit creation for the group.

“This negatively affected the funded income performance for the group for the three months under review,” ZB said in the statement of financial results for the period under review.

Nevertheless, ZB Holdings maintained a strong average liquidity ratio of 60 percent and kept non-performing loans below the regulated 5 percent benchmark.

The group’s total equity increased from $9,476 trillion as of December 31, 2023, to $10,444 trillion by March 31, 2024, driven by the robust performance of the period.

ZB Holdings’ capital and liquidity levels remained robust, with all business units, except for ZB Building Society, meeting the minimum regulatory capital requirements. Despite the positive financial performance, no dividend was declared for the quarter under review.

Looking ahead, ZB said the economic landscape presents several challenges as the Government of Zimbabwe projects a decline in annual gross domestic product growth from 5,5 percent in 2023 to 3,5 percent in 2024, exacerbated by an anticipated El Niño-induced drought.

This environmental challenge is expected to lead to increased import bills for grain to address food shortages. The introduction of new currency modalities and the drought are anticipated to create a difficult trading environment in the short to medium term.

Despite these hurdles, ZB Holdings remains resilient and dedicated to delivering value-adding financial solutions to the nation.

The group’s strategic focus on sustainable earnings and cost management positions it well to navigate the challenging economic conditions ahead.

herald