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Description
CBZ bank Limited is a commercial bank in Zimbabwe; and licensed by the national banking regulator, the Reserve Bank of Zimbabwe. CBZ Bank was founded in 1991 when the Zimbabwe government took control of the defunct Bank of Credit and Commerce. The government assumed a 100% ownership, but this has been diluted through privatisation and its listing on the Zimbabwe Stock Exchange in 1998. CBZ Bank is now a wholly-owned subsidiary of the listed financial services group CBZ Holdings.
CBZ Holdings is Zimbabwe’s largest bank holding group by total assets, deposits, loans and market capitalization. In fact, the group is more valuable than the other four listed banks combined. CBZ Holdings Limited is a financial services company that offers commercial banking, mortgage finance, asset management, short- and long-term insurance, and other non-financial services. The Group’s major segments include Banking, Insurance, Investments and Agro-Business.
It has various operating units, such as CBZ Bank Limited, which provides commercial banking and mortgage finance products; CBZ Asset Management (Private) Limited, which provides fund management services to investors through placement of either pooled portfolios or individual portfolios, and CBZ Insurance (Private) Limited, which provides short term insurance. Its other operating units include CBZ Properties (Private) Limited, which acts as the property investment arm of the business; CBZ Life (Private) Limited, which provides long term life insurance.
Financials
| INCOME STATEMENT | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
| Net interest income | -8,408,941 | -46,214,822 | -26,726,030 | 224,317,570 | 382,263,658 |
| Fees and Commissions | 62,582,558 | 69,078,973 | 91,398,386 | 671,648,172 | 2,267,202,877 |
| Other Income | 0 | 0 | 0 | 0 | 0 |
| Total operating Income | 184,214,070 | 158,985,195 | 175,033,845 | 1,238,889,839 | 2,718,833,593 |
| Impairments | 23,510,196 | 19,847,256 | 36,011,671 | -16,944,764 | 223,903,930 |
| Net Profit | 35,237,325 | 23,785,461 | 26,395,352 | 448,293,943 | 833,091,387 |
| BALANCE SHEET | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
| Loans and Advances | 1,020,968,516 | 1,007,172,157 | 941,408,103 | 3,024,975,659 | 3,013,900,920 |
| Liquid Assets | 715,135,762 | 118,820,888 | 146,114,293 | 2,938,535,627 | 2,836,508,143 |
| Goodwill and Intangibles | 1,509,346 | 2,697,421 | 2,530,080 | 10,023,483 | 10,440,774 |
| Average interest earning assets | 1,028,201,788 | 1,767,708,214 | 1,841,270,325 | 3,024,975,659 | 4,205,655,392 |
| Total Assets | 1,974,358,536 | 2,086,609,040 | 2,192,655,169 | 15,217,754,384 | 17,832,226,148 |
| NPLs | 76,071,314 | 70,622,426 | 187,213,369 | 100,130,234 | 104,904,451 |
| Total Deposits | 1,684,277,828 | 1,777,154,753 | 1,853,677,673 | 12,914,671,236 | 13,065,038,880 |
| Shareholders’ Funds | 261,877,057 | 283,107,318 | 309,685,605 | 1,961,594,636 | 2,818,336,309 |
Ratios
| RATIOS | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
| Net Profit margin | 19.13% | 14.96% | 15.08% | 36.19% | 30.64% |
| Net interest margin | -0.82% | -2.61% | -1.45% | 7.42% | 9.09% |
| Cost/Income Ratio | 63.98% | 69.59% | 63.93% | 59.69% | 40.13% |
| Loan to Deposit | 60.62% | 56.67% | 50.79% | 23.42% | 23.07% |
| Loan to Total Asset | 51.71% | 48.27% | 42.93% | 19.88% | 16.90% |
| NPLs/Gross loans | 7.45% | 7.01% | 19.89% | 3.31% | 3.48% |
| Price/TBV | 0.23 | 0.19 | 0.25 | 0.37 | 10.74 |
| liquid assets/total assets | 36.22% | 5.69% | 6.66% | 19.31% | 15.91% |
| Tier Capital Ratio | 11.00% | 17.00% | 16.00% | 15.00% | 8.28% |
CBZ VS Other listed banks
Despite steep inflation rates in the last three years total assets held by listed banks fell in the last financial year ending December 2019 save for CBZ Holdings. The four banks had an average 25% decline in size of assets whereas CBZ’s assets rose by 17.2% – inflation adjusted
On average CBZ returns have lagged peers in the last financial year end. ROE (Return on Equity) was 11.1%. With the exception FCB that recorded a negative net profit, players had better ROE performance than CBZ averaging 18%. ROA (Return on Assets) performance was also higher for the banks that outperformed CBZ on ROE.
On the contrary CBZ recorded the least cost to income ratio of 40.1% outperforming peers which averaged 70%. We take it that the bank’s poor returns’ showing may have been due to an overcapitalized balance sheet.
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