ZB to continue with organisational transformation

ZB Financial Holdings’ transformation journey resulted in improved 2022 outturn with the group achieving growth and profitability.

The transformational programme, which started early 2022, is designed to transform the organisation into a more people centric and to enhance its customer journey.

The transformation journey is also aimed at delighting the group’s customers through a combination of digitalisation and service excellence.

Group chairman, Mrs Pamela Chiromo, said the company will continue to focus on revenue growth and cost optimisation strategies with an overall aim of growing and strengthening the balance sheet position.

“The group will continue with its organisational transformation programme focusing more on improving the effectiveness and efficiencies of back-end systems,” she said in a statement of financials for the year ended December 31, 2022.

Chief executive, Mr Shepherd Fungura, said the group progressed its transformation programme during 2022, which entailed a review of its business model and organisational design.

He said the project to repurpose bank branches into group – wide customer service centres to enhance customer convenience, has been a huge success.

“…as at the end of December 2022, a total of 25 branches had been renovated and converted into customer service centres. The remaining 20 will be done in 2023,” he said.

For the year under review, group total income grew 75 percent to $70,54 billion compared to $40,34 billion in 2021 largely driven by significant rise in trading income and fair value credits.

The group’s financials show that net interest income increased by 77 percent, from $11,35 billion in 2021 to $20,05 billion in 2022, underpinned by the growth in the loans and advances book.

Mr Fungura said gross loan impairment charges to the income statement surged by 229 percent, from $2,13 billion in 2021 to $7,03 billion in 2022.

“As a result, net income from lending activities registered a growth of 41 percent from $9,22 billion in 2021 to $13,01 billion in 2022,” he said.

The group’s commissions and fees moved up by 38 percent to $15,91 billion from $11,57 billion in 2021, supported by growth in both number of customers and volume of transactions as a result of the group’s organisational transformation programme journey.

Other operating income improved by 394 percent from $4,5 billion in 2021 to $22,23 billion and this income was largely constituted by the realised foreign exchange gains from treasury trading activities and unrealised gains from revaluation of the group’s foreign denominated balances.

Fair value adjustments moved from $12,19 billion in 2021 to $15,49 billion, as a result of higher fair value gains from investment properties.

According to Mr Fungura, net insurance related earnings increased by 36 percent from $2,85 billion in 2021, to $3,88 billion in 2022, on the back of a 120 percent rise in gross premiums from $6,81 billion in 2021 to $15,01 billion in 2022.

This was partially off-set by a rise in insurance related expenses by 181 percent from $3,96 billion in 2021 to $11,12 billion in 2022.

However, the group’s operating costs rose by 46 percent to $40,70 billion from $27,92 billion in 2021, largely on account of the effects of inflation.

“Profit from ordinary activities improved by 140 percent to $29,83 billion from $12,41 billion in 2021 and the performance was also enhanced by a 1 909 percent rise in share of associate companies’ profit net of tax, from $0,26 billion in 2021 to $5,39 billion in 2022,” said Mr Fungura.

During the year under review, total assets for the group increased by 85 percent in real terms, to close the year 2022 at $320,96 billion.

Mr Fungura said a rebalancing of the asset mix was undertaken during the year through acquisition of Mashonaland Holdings, which saw a 516 percent increase in investment properties.

Deposits and other related funding account balances grew by 62 percent to $109,21 billion from $67,61 billion as at 31 December 2021.

On operations, ZB Bank Limited posted a profit after tax of $14,52 billion in 2022, as compared to $6,41 billion in 2021.

The bank’s total assets stood at $200,36 billion as at 31 December 2022, from $127,29 billion as at 31 December 2021.

ZB Building Society posted a profit after tax of $4,47 billion in 2022, as compared to a profit of $2,80 billion in 2021.

The Society’s total assets stood at $17,74 billion as at 31 December 2022, from $10,09 billion as at 31 December 2021.

In terms of the group’s insurance operations, ZB Reinsurance posted a profit after tax of $1,95 billion in 2022 compared to $1,53 billion in 2021.

ZB Life Assurance posted a profit of $2,32 billion in 2022, compared to a loss of $0,09 billion in 2021 and its total assets increased in real terms from $20,24 billion as at 31 December 2021 to $28,09 billion as at 31 December 2022.

Mr Fungura said the group has adopted a regional expansion strategy and in November 2022, it successfully launched reinsurance operations in Botswana.

During the year, the group acquired additional equity interest in Mashonaland Holdings Limited (Mash) and achieved a shareholding of above 50 percent, granting it control of Mash and subsequently became a subsidiary of the Group with effective 31December 2022. -businessweekly