Omega Ukama 
CABS says its income and assets declined significantly in 2019 due to the hyperinflation in Zimbabwe throughout the year.
The building society’s results show that it incurred an inflation adjusted net loss of $159 million during the year, as the country’s inflation increased by more than 400 percentage points.
“Inflationary pressures over the past year have narrowed the society’s inflation adjusted and historical net income margins… with the changes in the economic environment, the Society witnessed a significant loss in the value of its monetary assets,” Washington Matsaira, CABS’ board chairman said in the building society’s results for the year ended December 31, 2019.
The Zimbabwe dollar was reintroduced in 2019 after a decade of multi-currencies use.
Average month-on-month inflation for the year was 17 percent, while by the end of the year the local currency was trading at 17 to the United States dollar on the interbank market.
Matsaira said inflation adjusted net interest income declined from $617 million in 2018 to $290 million in 2019 due to “subdued effective interest rates in the current period compared to 2018”.
The society’s inflation adjusted non-interest income declined from $387 million in 2018 to $279 million in 2019 “as disposable incomes were negatively affected by the inflationary environment”.
Asset quality, however, improved resulting in the non-performing loans ratio declining to two percent from 5,8 percent in 2018.
Inflation adjusted gross loans and advances fell by 70 percent from $5,08 billion to $1,54 billion and inflation adjusted deposits fell by 63 percent from $7,33 billion to $2,74 billion.
Inflation adjusted total assets declined by 45 percent from $9,3 billion to $5,1 billion “as financial assets growth failed to match inflation”.
The chairman said the outlook points to challenges on several fronts, and the society will focus on supporting customers and staff, “ensuring that shareholder value is preserved and positioning the bank for the future”.
“CABS will continue its digital transformation initiative in the outlook period,” he said.
Meanwhile, as cybercrime has increasingly become a global challenge, the society says it has taken steps to manage the risks presented by this trend.
“The steps taken during the year include; the introduction of the CABS chip and pin debit cards, automation of the reconciliation processes, and introduction of the CABS mobile app 2.0 with enhanced security and functionality.
“The Society will continue to invest systems to help manage cybercrime risk,” Matsaira said.
newsdesk@fingaz.co.zw
