ZB Financial Holdings says its new operating model saw growth in net revenue of 488 percent ahead of its projections and was higher than the level of cost expansion.
In its trading update for the 3rd quarter (Q3) ended September 30, 2023, the group said this created positive jaws, which provides a buffer against short-term structural dislocations in the operating environment and enhances prospects for the future sustainability of operations.
“When comparing the current period to the same period last year (Q3 2022), revenue from lending activities showed growth of more than 108 percent,” the company said.
The group’s net interest income for the period was driven by growth in USD loans and positive trading margins.
Non-interest income improved by 638 percent from $135 billion for the nine months to Q3 2022 to $997 billion for the nine months to Q3 2023.
The group highlighted that its wide channel network witnessed customer base growth across retail and corporate banking segments.
This saw the number of customer accounts increase by more than 100 percent to 722,510. “This triggered increased transaction volumes, which caused the expansion in commissions and fees by $142 billion in Q3 2023 when compared to the Q3 2022 result of $33 billion,” the group noted.
The group noted that exchange gains of $266 billion and fair value of $513 billion, representing a 216 percent and 3595 percent improvement on Q3 2022, respectively, significantly contributed to the total income.
During the quarter under review, the insurance business performed well by recording an increase of 23 percent on gross premium in Q3 2023, due to improved insurance product sales across all the service centers, as well as lower mortality claims, improved investment returns, and growth in net premium income from regional operations.
The group said that given the inflationary environment, property remains a preferred investment and has maintained an occupancy rate of at least 90 percent over the nine months to September 30, 2023, which boosted net property income.
For the quarter under review, the operating expenses grew by 258 percent, driven by a high-inflation environment, which pushed up both remuneration and administration costs.
“The group’s operations continued to be sustainably profitable, posting a profit after tax of $735 billion, a 988 percent improvement from the same period last year.
The group’s total assets grew from $1,049 billion as of December 31, 2022, to $2,728 billion as of September 30, 2023.
The group’s loan book grew by 332 percent from $205 billion as of December 31, 2022, to $889 billion as of September 30, 2023, as USD loans came through at increased levels, which were then translated at a higher rate at the end of the period.
Total deposits grew by 192 percent from $357 billion as of December 31, 2022, to $1,043 billion as of September 30, 2023.
“Despite general liquidity pressure experienced during Q3 2023, the group was able to maintain an average liquidity ratio above 55 percent throughout the period,” the business said.
For the period under review, the group said it had financed projects in support of renewable energy, youth development, education initiatives, and health programmes.
However, the group said that despite some challenges, it remains resilient and committed to fully implementing strategies anchored on a ‘customercentric’ business model offering a one-stop-shop financial services solution to its customers in the newly restructured service centers.