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CBZ banking group profits down 20pc
07/08/2014 00:00:00
by The Source
CBZ targets to keep bad loans at 8pct
CBZ bank's profits down 13 percent

CBZ HOLDINGS on Thursday reported a 20 percent decline in after-tax profit for the half-year to June 30, mostly on higher interest expense, chiefly on money market deposits, and operating expenditure.

The financial group also reported a 15 percent jump in its impairment charge, to $7,6 million, compared to the prior period.

The banking group bemoaned tight liquidity conditions in the economy, and the attendant high cost of funding.

CBZ’s total income inched up 1 percent to $69,6 million, while total expenditure was 10 percent up at $46,4 million. Profit after tax was $12,8 million, down from $16 million previously.

Loans and advances rose 1,5 percent to $1,044 billion in the period under review, while the group’s assets expanded 8,6 percent to $1,693.4 billion, confirming its status as the country’s largest financial institution.

Non-performing loans rose to $66,8 million from $45 million, giving a non-performing loan ratio of just over 6 percent, below the 17 percent industry average.

CBZ, which narrowed write-offs from $33,5 million as at December 2013 down to $1 million at the close of the half-year, currently has a 75 percent coverage ratio for its non-performing loans and says it targets total cover. CBZ’s deposits also grew 9,4 percent to $1,457.2 billion.

The flagship banking subsidiary remains the overwhelming contributor to CBZ Holding’s income, weighing in with 92 percent, marginally down from 93 percent at year-end. The insurance business’ contribution grew to 7 percent from 5 percent in December, while asset management also contributed a percentage point less, at 1 percent.

CBZ is betting on a higher net interest margin from a lowly priced $200 million bond it is planning in the second half of the year. The group also plans to cash in on its $70 million land bank.


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