Business / Companies
Improved operating performance from ZB Financial Holdings
30 Aug 2011 at 02:24hrs | Views
ZB Financial Holdings posted an improved operating performance for the interim period to 30 June 2011 as PBT climbed 437% year on year to $7 million. Total income grew 89% year on year to $19.1 million on the back of a 124% growth in non-funded income to contribute 78% to total income.
The growth in non-funded income was driven by a strong growth in fee income as the number of active accounts increased. Non-funded income was also enhanced by a $3 fair value adjustment of the equity portfolio. The group cost to income ratio improved to 72% from 100% the prior period.
The banking unit posted earnings of $3.1 million, mortgage business $1.3 million, life $0.9 million and reinsurance earnings of $0.5 million on an underwriting profit of $1.5 million. The amalgamation of common operations of the bank and mortgage was completed.
The balance sheet increased 13% from year-end to $198.6 million driven by the 13% and 37% growth in deposits and advances, respectively. The loan to deposit ratio improved to 79% from 66%. Given the tight liquidity conditions and generally low capacity utilisation, short-term debt servicing constraints remain a challenge resulting in the nonperforming loan to advances ratio deteriorating to 6% from 5%.
The group is still on the United States Office Foreign Assets Control list of Specially Designated Nationals. Nonetheless, the group has managed to maintain a strong depositor base. We believe the removal of the restrictive measures will open opportunities for group. The group continues to evaluate the possibility of a technical and strategic partner.
The litigation in which Transnational Holdings is challenging the acquisition by ZB Financial Holdings of a controlling stake in Intermarket Holdings is still pending. ZB Financial Holdings has a significant asset base, with significant potential to unlock shareholder value in the future. The market currently values the group's 30% stake in Mashonaland Holdings at $16.2 million against a group market capitalization of only $17.5 million.
The growth in non-funded income was driven by a strong growth in fee income as the number of active accounts increased. Non-funded income was also enhanced by a $3 fair value adjustment of the equity portfolio. The group cost to income ratio improved to 72% from 100% the prior period.
The banking unit posted earnings of $3.1 million, mortgage business $1.3 million, life $0.9 million and reinsurance earnings of $0.5 million on an underwriting profit of $1.5 million. The amalgamation of common operations of the bank and mortgage was completed.
The group is still on the United States Office Foreign Assets Control list of Specially Designated Nationals. Nonetheless, the group has managed to maintain a strong depositor base. We believe the removal of the restrictive measures will open opportunities for group. The group continues to evaluate the possibility of a technical and strategic partner.
The litigation in which Transnational Holdings is challenging the acquisition by ZB Financial Holdings of a controlling stake in Intermarket Holdings is still pending. ZB Financial Holdings has a significant asset base, with significant potential to unlock shareholder value in the future. The market currently values the group's 30% stake in Mashonaland Holdings at $16.2 million against a group market capitalization of only $17.5 million.
Source - Imara Stockbrokers
