CABS loan book improves

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CABS’ credit risk was upgraded after the quality of the mortgage lender’s loan book improved, with its non-performing loans ratio reduced to 0,23 percent during the year to December 31, 2021 from 0,41 percent in the prior year.

In a statement accompanying financial results, CABS’ managing director Mehluli Mpofu said in inflation adjusted terms, the institution achieved a surplus of $5,88 billion from $2,56 billion during the period under review.
“The improvement in the surplus was driven by growth in both interest and non-interest that surpassed the 57 percent growth in operating expenses,” he said.
The society’s financial position improved during the year, with total assets increasing by 43 percent from $40,7 billion in 2020 to $58,2 billion in 2021 and the loan book growing from $11,34 billion to $27,53 billion.
“The quality of the loan book improved with the non-performing loans ratio reducing from 0,41 percent in 2020 to 0,23 percent in 2021,” Mpofu said.
A high ratio means the bank bears a greater risk of loss if it fails to recover the owed amounts, while a low ratio means that the outstanding loans pose a low risk to the bank. Net interest income and net fee income improved during the year under review, with net interest growing by 161 percent to $5,66 billion from $2,17 billion. Net fee and commission income grew by 69 percent to $5,23 billion. Mpofu attributed the bank’s performance to increases in lending and growth in digital transactions.
“The digitalisation strategy resulted in an increase in the volume of digital transactions through the provision of a safer and more convenient digital experience for our clients,” he said.
Mpofu said the outlook was positive based on the strategy in place. “The digitalisation strategy, coupled with the customer centric plans, will grow the business and counter the Covid-19 pandemic that remains a potential deterrent to our growth strategy,” he said.
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