Almot Maqolo, Staff Writer 
FINANCIAL services group CBZ Holdings (CBZ) says it has managed to insulate its lending business from sectoral shocks by diversifying loans across several sectors and spreading risk.
By diversifying their loan portfolios, banks tend to reduce their exposure to specific sectors, which can help them avoid losses during economic downturns or other unexpected events
The Zimbabwe Stock Exchange (ZSE)-listed concern — once biased towards agriculture — has steadily spread and upped its lending activities to other sectors of mining and manufacturing in recent years while maintaining prudent credit risk management.
“If you looked at our book, say, five years ago, you would have seen us light in mining, but today I would argue that we are the largest financiers into gold mining.
“We are also significant financiers of light manufacturing,” CBZ Holdings chief executive Lawrence Nyazema recently told The Financial Gazette.
“So, what you will see is a more diversified lending book that is now carrying significantly less risk than perhaps what we used to take in the past. There used to be a discount on CBZ, and that discount was largely because the quality of our book was under question,”
“I am confident that the quality that we currently have on our lending book in CBZ is at par with the market and what we want is for it to be as good as what you see elsewhere in this market going forward.”
The financial services giant has had extensive exposure to the agricultural industry where it has been financing government programmes.
“Between agribusiness in CBZ Bank and Agro Yield, which was our standalone company, at one stage we were doing up to 50 percent of the lending that was going into agriculture.
“That number has since come down, but we are an active player when it comes to agriculture.
“Off the top of my head, I would say around 15 percent of our half a billion books goes towards agriculture,” he said.
“What we have also been doing over the years is to make sure that we spread our love to all sectors of the economy,” he added.
Despite tight liquidity conditions, CBZ has managed to sustain lending and revenue growth for the nine months ending September 30, 2024, thanks to its solid asset base.
The bank remains committed to supporting critical sectors such as agriculture, manufacturing, and private enterprises while maintaining prudent credit risk management.
As Zimbabwe’s largest bank by assets and deposits, CBZ reported total assets of ZiG30,05 billion and deposits of ZiG18,51 billion at the end of the reporting period.
The group posted a net income of ZiG2,6 billion, mainly driven by net interest income of ZiG880,02 million and a loan portfolio of ZiG8,90 billion, showcasing its dedication to maintaining high-quality assets.
Additionally, non-interest income reached ZiG1,80 billion, reflecting the group’s strategy to diversify revenue streams and reduce reliance on interest income, thereby enhancing overall income stability.
The bank also reported a profit after tax of ZiG1,01 billion.
Nyazema emphasised that CBZ effectively utilised its strengths to achieve consistent growth over the nine-month period.
Looking forward, CBZ expects credit expansion and increased economic activity, bolstered by easing global interest rates that are anticipated to relieve borrowers.
In positive response from the market, CBZ Holdings’ share price surged by 90,8 percent, closing the quarter at ZWG14.
This translates to a market capitalization of ZiG7,3 billion, securing the fourth position on the Zimbabwe Stock Exchange (ZSE). newsdesk@fingaz.co.zw
