ZB Bank lending related net income increases by 342%

Business Reporter

DIVERSIFIED financial services concern, ZB Financial Holdings has seen lending related Net Interest Income (NII) rising by 342% on the back of sound management practices propelling the entity as a market leader despite obtaining headwinds.

 Presenting the group’s financial performance for the period ended December 31 2021 recently, ZBFH group, group chief executive officer, Shepherd Fungura said the revenue category registered considerable growth.

“As the loans and advances book rose, loan impairment charges also rose by 342%, from ZW$0.453bn in 2020 to ZW$0.621bn in 2021. Resultantly, net income from lending activities rose from ZW$0.607bn in 2020 to ZW$2.683bn in 2021, a 342% increase,” he said.

In banking terms, NII is a financial performance measure that reflects the difference between the revenue generated from a bank’s interest-bearing assets and the expenses associated with paying on its interest-bearing liabilities.

A typical bank’s assets consist of all forms of personal and commercial loans, mortgages, and securities.

Overall, during the review period, NII registered a solid performance during the year 2021, rising by 212%, from ZW$1,060 billion in 2020 to ZW$3,304 billion in 2021.

“During the year, the bank recorded a 122% increase in total income from ZW$5,2 billion in 2020 to ZW$11,736 billion in 2021. This performance outturn was on the back of an improved non funded-income.

“Banking commissions and fees contributed significantly, rising by 83%, from ZW$1.836bn in 2020 to ZW$3,366 billion in 2021,” said Fungura.

The fair value adjustments increased by 1 526% from ZW$0.218bn in 2020 to ZW$3.548bn in 2021 mainly as a result of improved performance of the Zimbabwe Stock Exchange and investment property valuations.

Net insurance related earnings improved from a loss of ZW$0.003bn in 2020, to a profit of ZW$0.830bn in 2021, on the back of a 7% rise in gross premiums from ZW$1.845bn in 2020 to ZW$1.982bn in 2021, whilst a 38% decrease in insurance related expenses was recorded, from ZW$1.847bn in 2020 to ZW$1.152bn in 2021.

“In the outlook, the domestic economy is projected to maintain the growth momentum in 2022 and beyond, with the government projecting a 5,5% GDP growth in 2022, supported by higher output in mining, manufacturing, agriculture, construction as well as the accommodation and food services (tourism) sector,” added ZB.

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