THE country’s largest banking group CBZ Holdings reported a 9 percent decline in full-year earnings, weakened by higher off-shore borrowing costs, chief executive Never Nyemudzo said.
Headline earnings, which strips certain one-off items and the widely watched measure of profitability in Zimbabwe, was lower at 5.61 cents in the year to the end of December versus 6.18 cents in the prior year, the bank said.
CBZ, which has the most deposits in Zimbabwe, said profit after tax fell 10 percent to $33 million.
Nyemudzo said non-performing loans – debt which has not been serviced for three consecutive months – spiked to $87 million from $47 million in 2013. The money would be recovered through the sale of security pledged by borrowers against loans.
He said bad debts, at 7.3 percent of the bank’s total loans of $1.2 billion advanced to clients by the end of December, were well below the banking industry average of 16 percent.
Nyemudzo told an analyst briefing the market was characterised by high credit risk and rising cost of funding.
Banks in the southern African country are struggling due to inadequate capital and growing non-performing loans, which has seen the central bank establishing an asset management firm that has already taken over $65 million in bad debts.
Mauritian lender AfrAsia on Tuesday closed its Zimbabwe unit after facing cash flow problems.Advertisement