Source: CBZ unit in regulatory talks | The Financial Gazette May 2, 2017
ONE of the Zimbabwe Stock Exchange (ZSE)-listed financial services group, CBZ Holdings, subsidiaries is in discussion over a regulatory matter which may have an impact on the value of the company’s shares.
It is still unclear which subsidiary is involved in the discussions.
CBZ Holdings owns subsidiaries in banking, insurance, properties, and asset management in Zimbabwe trading as Datvest. CBZ Holdings Limited also wholly-owns an asset management unit in Mauritius.
In a cautionary statement issued on Tuesday, CBZ Holdings said shareholders should exercise caution when dealing with CBZ shares which traded at US9,96 cents.
“The directors of CBZ Holdings wish to advise the company’s shareholders and members of the public that one of its subsidiaries is currently involved in a regulatory matter which may, on finalisation have an impact on the value of the company’s shares,” said group legal corporate secretary, Rumbidzai Jakanani.
“The directors of CBZ Holdings Limited therefore advise the company’s shareholders and members of the public to exercise caution and to consult their professional advisors when dealing in the shares of CBZ Holdings until the finalisation of the aforementioned matter. The company’s shareholders and members of the public will be updated on the matter in accordance with the Zimbabwe Stock Exchange listing rules,” she said
Market watchers who spoke to the Financial Gazette said the only unit that could have a material impact on the value of the company’s shares was the banking unit as other units were “very small” to have a material impact on the group’s shares.
“It looks like this could be the bank. This is one unit which is material. For a unit to be material, it should contribute more than 20 percent to the group earnings. Other units are too small to be material,” commented one analyst.
Others suggested that it could be the group’s asset management unit in Mauritius.
“It has nothing to do with local regulators but foreign ones,” said another source.
In its financial results for the year to December 31 2017, CBZ Holdings, reported a 32 percent decline in profit after tax to US$23,8 million from US$35,2 million reported in previous year.
Group chief executive officer, Never Nyemudzo, said the bank which is the group’s flagship unit, was being affected by cash and foreign currency shortages, constrained credit expansion, balance sheet recession, formalisation of the economy and reduction in interest rates.
However, the group initiated cost containment measures that resulted in total expenditure falling by six percent.
CBZ Life contributed US$2,6 million to after tax profit and US$6,2 million to revenue. CBZ Asset Management’s profit halved to US$0,1 million while its total income was unchanged at US$2,1 million. CBZ insurance profit declined 18 percent to US$0,9 million with its revenue flat at US$3,4 million.