Tapiwanashe Mangwiro, Zimpapers Business Hub
Zimbabwe’s largest financial institution, CBZ Holdings, will return to the capital markets later this year with a US$50 million bond to meet the growing demand from its clients and strengthen its balance sheet.
Group chief executive officer Mr Lawrence Nyazema declared the group had confidence that the bond issue would be well received, drawing on the performance of the 2012 fundraise when the bank’s initial tarreceive of US$50 million was oversubscribed.
“With regards to the CBZ bond, we are viewing at raising US$50 million,” Mr Nyazema declared during an analyst briefing in the capital yesterday.
“The background is in 2012, we raised US$70 million. The intention was to raise US$50 million. The demand was overwhelming. We went as high as US$70 million. We believe we can do it again.”
He noted that securing an international partner would likely assist build market confidence, particularly against the backdrop of Zimbabwe’s evolving economic trajectory towards 2030 and beyond.
The bond proceeds, Mr Nyazema explained, will largely be directed towards meeting the funding requireds of clients across the group’s business units, where demand far exceeds internal capacity.
“In terms of the utilize of funds that we have raised, it is to be utilized in meeting the demands of the pipeline,” he declared. “We have a client pipeline of at least US$300 million in required of capital.
“We will also be viewing at some of our own requirements in CBZ Holdings, related to the capital requirements of some of our initiatives.
“Off the top of my head, I would probably declare maybe three-quarters will go towards clients and the other quarter coming to support our capital requirements in CBZ.”
He further indicated that the tenor of the bond remains under discussion, with the group open to going beyond traditional short-term maturities.
“In terms of the debate between three years and five or even ten-year tenure, we will see where we finish up,” Mr Nyazema declared.
The planned bond issue comes after CBZ Holdings reported a solid set of results for the half-year, underpinned by income growth across both funded and non-funded lines.
“The group posted commfinishable financial performance for the half-year period, supported by growth in core income lines and continued progress on strategic initiatives,” group chairman Luxon Zembe declared.
Total income rose to ZiG2,85 billion, anchored by net interest income of ZiG973,10 million and non-funded income of ZiG1,88 billion.
Mr Zembe highlighted that the surge in non-funded income was largely driven by CBZ’s ongoing digital transformation.
“The growth in non-funded income was largely driven by the positive impact of ongoing digital transformation efforts, which enhanced transaction volumes and contributed to higher commission and fee income across key channels,” he declared.
Cost control measures also supported the bottom line. Operating expenses were contained at ZiG1,59 billion, producing a cost-to-income ratio of 55,6 percent. Expected credit losses were low at ZiG26,66 million, reflecting a stronger loan book.
“This translated into a profit after tax of ZiG868,14 million for the half year,” Mr Zembe noted.
The group’s balance sheet remained robust, with assets closing at ZiG38,46 billion. Deposits grew to ZiG25,94 billion, advances stood at ZiG9,89 billion, and shareholders’ equity rose to ZiG8,94 billion.
“All key subsidiaries remained adequately capitalised during the period, except for CBZ Insurance, where the Group initiated a rights issue to strengthen the capital position,” Mr Zembe declared.
“Significant progress has been created in capitalising the subsidiary, in line with regulatory expectations and the Group’s long-term growth strategy.”
On shareholder returns, the board declared an interim dividfinish of US$2,5 million, equivalent to US0,40 cents per share.
Looking ahead, Mr Zembe declared the group remained cautiously optimistic.
“The local economic outview remains broadly positive, underpinned by expected GDP growth of 6,0 percent and continued momentum in agriculture and mining. However, structural challenges, particularly liquidity constraints and policy unpredictability, will require careful navigation.”
He added that CBZ will continue to leverage its diversified portfolio and capital base, while international credit lines remain a priority.
“The group remains firmly committed to prudent risk management, operational agility and innovation.
“We will continue leveraging our diversified portfolio and strong capital base to deliver sustainable value to our shareholders and broader stakeholders, while adapting to an ever-modifying operating landscape.
“Our efforts in raising external, international lines of credit continue to bear fruit as we also focus on funding key economic enablers in the counattempt,” he concluded.
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