ZB seeks $35m lines of credit

ZB seeks $35m lines of credit

Source: ZB seeks $35m lines of credit | Newsday (Business)

ZB Financial Holdings (ZBFH) is negotiating for $35 million lines of credit from regional banks, as it seeks to fund its various operations.

BY FIDELITY MHLANGA

“The group has made inroads in mobilising lines of credit. A $20m facility with a regional bank is at closing stage while another $15m for housing development is under negotiation,” ZBFH chief executive officer, Ron Mutandagayi said at an analyst briefing on Wednesday.

The search for new lines of credit comes as the group saw its deposits declining to $259,83 million in the half year ended June 30, 2017 down from $275,27 million in the same period last year on account of a 17% strategic retreat in wholesale funding.

Mutandagayi said deposits have remained transitory in nature, thereby, preventing the group “from underwriting long term assets”.

ZBFH’s profit after tax for the period grew to $8,17 million in the period under review from $5,94 million in the same period last year. Banking operations contributed 78%, while non-banking operations contributed 22% of profits.

Mutandagayi said net interest income went up to $9,15 million in the half year ended June 30 from $8 million during the same period last year, on the back of improved asset quality and a lower interest cost in tandem with the managed shift from wholesale funding to retail funding.

Wholesale funding contributed 34% in June 2017 compared to 52% in June 2016. The capping of interest rates on the lending book implemented from April 1, 2017 is set to affect margins negatively going forward, Mutandagayi said.

The non-performing loan ratio (NPL) improved to 13,6% as at June 30 from 22,57% at December 31, 2016 from the combined effects of loan recoveries and reclassification of cured debts.

Mutandagayi said the group was targeting an NPL ratio of 10% in the financial year ending December 31, 2017, but “will remain cautious, focusing on quality credit creation.

Deposits mobilised from most sectors decreased except for private individuals, construction, services and communication sectors.

Agriculture deposits went down to $6,36 million from $10,32 million, manufacturing dipped to $10,88 million from $16,28 million and financial services plunged to $49,49 million from $95,84 million during the period.

The bank had Treasury Bills of $117,2 million in the period under review from $118,6 million in the same period last year.

In an aggressive push to drive the use of plastic money, the group said it had invested in 3 000 point-of-sale devices, with 700 having been delivered.

Mutandagayi said substantial progress has been made towards the reintroduction of the Visa Card, with the launch expected in the third quarter of the year.

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