eBusiness Weekly
Tapiwanashe Mangwiro
CBZ Holdings, the country’s leading financial products and services provider, has been named among the best banks in Africa, a recent report shows.
In its World’s Best Banks 2023 — Africa report, Global Finance Magazine revealed that African banks are still strong and prepared to withstand any adversity.
The best bank in Zimbabwe, CBZ Bank, commands the market regarding assets, loans and deposits, according to Global Finance Magazine.
“The bank has committed to investing 2 percent of its income in green projects,” reads the report.
According to the magazine, for the first time in history, banks in Africa remained largely unperturbed in March 2023 when most emerging markets were on tenterhooks for fear that a crisis boiling up in the advanced world could spread globally.
It wrote, “Though not immune to global contagion, alarm bells did not sound in Africa. Africa’s banks have become quite resilient, after years of building robust Tier 1 capital baselines; consciously deciding to be conservative, unlike their Western counterparts; investments in technology and lately digitalization; and conforming to stricter regulatory scrutiny.”
Banker Raymond Chitsuwa said, “The fact that today global tremors come secondary to domestic disruptors has made banks in Africa focus keenly on buttressing their guard rails with concrete as they pursue growth.
With profits on a phenomenal rise, particularly among Tier 1 and Tier 2 banks, the effort to ensure continuous growth amid stiff competition is the new norm. This is fuelling rapid digitalization to enhance the quality of products and services, drive financial inclusion and motivate widespread regional expansion.”
Many banks on the continent, having built a solid base in their domestic markets, see expansion into new territories as necessary and CBZ is one of those banks through mergers and takeovers.
The listed financial services provider during its formative stages of its merger with First Mutual Holdings (FMHL) said it wants to create a Pan — African bank starting with that particular merger.
CBZ acquired 31,22 percent of FMHL from NSSA and according to the terms of the contract, the consideration was a blend of cash and a share swap in a 30/70 ratio. The rationale behind the share swap was to leverage CBZ’s strong share price on the Zimbabwe Stock Exchange and use it as currency for this transaction.
The bank’s management believes this transaction unlocked further value for existing shareholders and allowed for more wealth creation.
CBZ also has a desire to become a regional player. The acquisition of FMHL is a key part of this process as they have successfully established themselves in other jurisdictions within SADC and the goal of this merger was to maximise shareholder value and create an important corporate citizen in the process.
The bank also saw the merger as a way to gather the best financial talents in this country under one roof and use those talents to build and develop this nation and become the centre of financial transactions in this region.
CBZ recorded an increase of 24,7 percent in its inflation-adjusted profit for the year ended December 31, 2022, as it recorded a profit after tax of $33,04 billion compared to $26,49 billion that it made in the comparable period of 2021.
In its full-year abridged audited inflation adjusted financial results released to investors on the Zimbabwe Stock Exchange, the bank recorded total comprehensive income of $43,04 billion, a year-on-year increase of 32,4 percent as against $32,51 billion recorded in 2021.
Likewise, its interest income went up by 16,41 percent year on year to $87,21 billion compared to $74,91 billion in 2021, while its non-interest income appreciated by 125,47 percent to $179,02 billion from $79,39 billion in 2021.
The group is expected to continue driving the digital banking agenda for the growth of the non-interest income line.
