ZB Bank projects tough year ahead due to tight policy measures

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By Alois Vinga

LEADING financial services group, ZB Financial Holdings (ZBFH) has bemoaned the tight policy measures impact on credit creation capacity on the back of plans to employ robust strategies to keep the entity above the waters.

In April 2024, the Reserve Bank of Zimbabwe (RBZ) governor, Doctor John Mushayavanhu introduced a raft of measures which include a structured currency with a sound supportive basis to curtail inflation and uphold exchange rate stability.

But presenting the group’s performance for the period ended December 31 2023, ZBFH acting chairperson, Agnes Makamure said while the second half of the year witnessed the easing of economic variables such as inflation and exchange rates, credit creation was not an easy go.

“This was mainly attributable to the tightening of monetary policy by The Central Bank, which curtailed speculative behaviour in the market. On the other hand, the downside of a tight monetary stance was the deceleration of credit creation as a result of liquidity challenges.

“This negatively affected funded income performance for the group and reversed some of the foreign exchange gains recorded in the first half of the year. The economy also witnessed an increase in usage of US$ across all sectors of the economy.

“This increased the demand for US$, resulting in increased USD revenues for the group,” she said.

The observations resonate with other economic players who have indicated that demand in the economy has been going down due to tight liquidity amid calls for monetary authorities to put in place measures to plug deceleration.

Meanwhile, during the period ZB Bank Limited posted a profit after tax of ZW$366,751 bn in 2023 up from ZW$68.464bn in 2022. Its total assets stood at ZW$2.168trn as of 31 December 2023, from ZW$911.032bn as of 31 December 2022.

ZB Building Society posted a profit after tax of ZW$60.907bn in 2023 up from a profit of ZW$21.492bn in 2022.

The Society’s total assets stood at ZW$156.069bn as of 31 December 2023, from ZW$85.256bn as of 31 December 2022. During the year under review, the Banking Cluster progressed the project to upgrade its core banking system, and the project continues into FY2024.

“Although the economic environment is likely to remain challenging in 2024 as characterized by high levels of inflation, exchange rate volatility and climatic changes particularly effects of EI-Nino.

“The Group is confident that set strategies will assist it to navigate these erratic economic conditions through the implementation of effective front-end systems, brand equity promotion and continuation with its mantra of creating happy people,” added Makamure.