CBZ Holdings to maintain market dominance

CBZ Holdings (CBZ) says it is targeting to grow its asset base to $3 billion this year as the financial institution seeks to maintain its dominance on the local market.
The diversified group, which has been among the pace setters in the local financial services space for more than a decade, grew its asset base by 13,5 percent to $2,5 billion during the first six months of the year.
“We expect that by year end our total assets will grow by 16,5 percent while our asset management should grow by 14,1 percent and total income we expect to grow by 13,3 percent,” Blessing Mudavanhu, CBZ’s chief executive, told analysts last week.
A 16,5 percent increase would see the groups asset base closing the year at over $2,9 billion, cementing its position as the largest financial services group in the country.
The group said it processes about 29 percent of national transactions while it commands approximately 24 percent of industry advances and 22 percent of industry deposits. The group says its subsidiary, CBZ bank has 496 000 accounts while its insurance unit administers 153 000 policies.
CBZ’s asset management unit closed the half-year with $250 million in funds under management.
Mudavanhu said the group is expanding its scope into the investments and advisory business lines.
“Given our history in Zimbabwe, and our size, and the capital that we have in terms of knowledge, there are opportunities that we think exist within the investment and advisory transaction space, this is a space that we think we would like to focus on more and more,” he said.
The group’s growth has been somewhat skewed away from its core business lately with advances having shrunk 18,5 percent during the period under review. The listed financial services group said it expects advances to decrease by a further 22,5 percent by year end, despite a projected increase in deposits of 16,5 percent.
“My colleagues and I have some homework because we expect loans and advances to decrease, core banking is about banking, we realise that and we have to do some homework on that score. But that homework is also a reflection of market conditions,” the chief executive said.
CBZ’s investments in securities also increased significantly over the period under review with a particularly marked upsurge in investments in Treasury Bills (TBs). The group maintains that the securities remain an attractive investment despite alarm raised by some on risks associated with the securities.
“…with TBs we consider a number of issues, yield being one of them. If you look at the related operating costs, there are very minimal, so from a business point of view, if you are going to make an overall return, you have got to contain costs and at the yield that we are getting from these instruments at the moment, they are still an attractive investment,” Colin Chimutsa, CBZ chief financial offer said at the same