P. Zimunya CBZ Bank Managing Director

P. Zimunya

Managing Director

It is my pleasure to present to you the results for CBZ Bank Limited for the year ended 31 December 2015. The year 2015 was another successful year for CBZ Bank Limited. We achieved strong financial performance, continued to successfully implement our strategy and laid a strong foundation for our future.

Performance Overview

The Bank’s profit after tax grew by 61% to $26.2 million compared to the previous year. The growth in profit after tax was mainly driven by a 26% growth in net interest income, 10% growth in non-interest income and a reduction in cost to income ratio from 68% to 62%. The reduction in the cost to income ratio was due to the various cost reduction strategies implemented by the Bank as part of its cost reduction drive.

The Bank’s total assets increased by 20% from the 2014 figure of $1.5 billion to $1.8 billion. This was based on the strength of the Bank’s deposit mobilisation efforts which resulted in an increase in deposits by 20% to close the year at $1.7 billion. Deposit mobilisation efforts have centered on improved customer service, efficient and accessible distribution channels and the financial inclusion drive.

The Bank’s loans to deposit ratio improved from the 2014 ratio of 74% to 58% as at 31 December 2015. The reduction is due to sustained efforts to improve quality of earnings. Asset quality improvement initiatives centered mainly around enhanced collection efforts. Consequently, there has been a growth in money market assets by 122%. The growth in money market assets has thus contributed positively to the liquidity and capital adequacy.

Divisional Performance


The division continues to be the leader in providing innovative financial solutions to the retail needs of the Bank’s customers. During the year under review a number of innovative products were launched and received positively by the market. These products are aimed at enhancing financial inclusion in the country, making banking easily accessible and bringing convenience to the customer. During the year products introduced were:

  • CBZ Agency Banking;
  • CBZ CashPlus student account ;
  • CBZ SmartCash Extra account;
  • Debit card for SME’s;
  • ZINARA Car radio licensing;
  • Visa credit card upgrade to chip and pin;
  • Private school fees loans;
  • CBZ mobile application;
  • 24 Hour CBZ Contact centre.

Business Banking (Microfinance & Small to Medium Enterprises)

During the year the Bank incorporated a new division, Business Banking. The Business Banking Division plays a pivotal role in sourcing affordable lines of credit for onward lending to microfinance and small to medium enterprises. The Division offers innovative financial solutions such as credit, savings, business training, medical insurance, remittances, and mobile banking products country wide. The geographical coverage is urban, peri urban and rural. The roll out of the Agency Banking model will see the Division penetrating some remote areas in line with our financial inclusion drive. The Division opened two Business Banking centres in Harare and in Bulawayo and plans are under way to open two more centres in Masvingo and Mutare respectively.

To fulfill its mandate, the Division secured a US$ 10 million line of credit from PTA Bank for onward lending to viable Small to Medium Enterprises throughout Zimbabwe. The fund is intended to boost production capacity in industry, create employment and increase exports targeting the following sectors in all the country’s ten administrative districts:

  • Manufacturing;
  • Transport;
  • Distribution;
  • Agro processing;
  • Services;
  • Agriculture;
  • Tourism;
  • Poultry.

Mortgage Finance

In an effort to compliment Government’s initiatives in the reduction of the national housing backlog, provision of decent accommodation and to eliminate informal settlements in urban areas, the Bank commenced development of projects in Nehosho in Gweru (1 095 stands), Kwekwe (415 stands), Chikanga (279 stands) and various projects in Victoria Falls namely Bufferzone Mkhosana (540 stands), BC847 Scheme (411 stands), Bufferzone Chinotimba (57 stands) and Labor of Longlands in Marondera (3 800 stands).

These projects have made it possible for the previously excluded low income earners and the informally employed to own decent low cost houses. Going forward the Division will continue to seek opportunities to unlock value in the property and land portfolio whilst contributing to the improved welfare and wellbeing of the country’s citizens through decent and affordable housing. Furthermore the CashPlus Housing Saving Account allows a customer to save towards the purchase of their own house, with the bank providing a mortgage loan on a dollar for dollar basis with what has been saved by the client.


The Division reduced the Bank’s cost of funding as seen by the 7% decrease in the interest expense from the December 2014 figure of $100 million to $94 million in 2015. This was achieved through the retirement of expensive term deposits and substitution thereof by lower cost retail deposits.

Custodial Services

The Division registered tremendous growth in assets under custody. Total assets under custody for both Institutional investors and Retail clients grew by 51% from the prior level of $127 million in December 2014 to $192 million by December 2015. Going forward, the Division seeks to gradually move away from the low cost strategy to a mixed cost strategy, employ aggressive business development initiatives and increase visibility to grow the business.

Corporate Banking

The Division was instrumental in the growth of deposits from corporate clients during the year. Total corporate banking deposits contributed 21% to the total Bank deposits. Further the Division worked tirelessly to improve the quality of the Bank’s advances book which culminated in a decline in the loans to deposit ratio from 74% to 58%.

Performance awards

In line with the Bank’s vision of being “the preferred provider of financial solutions in Zimbabwe with a global reach”, the Bank won various awards during the year as highlighted on page 22. We take pride in our achivements.

Compliance Ratios

Over the past years, the regulatory and supervisory environment for Banks in Zimbabwe has changed, a necessary reaction to the parlous state of the environment in which the Bank operates. The Bank has responded to the vast changes and remains firmly committed to be a strongly capitalised entity meeting regulatory requirements. The Bank’s Capital Adequacy ratio as at 31 December 2015 was 16.3% which was above the minimum required by the Central Bank of 12%. Total core capital base for the Bank was US$133 million against the minimum required by the Central Bank of US$25 million. Our liquidity ratio was 51.8% which was also above the regulatory minimum of 30%.

Credit rating

The Bank had a long term credit rating of A and short term rating of A1 as rated by the Global Credit Rating of South Africa. These ratings provide further evidence of the strength and soundness of the Bank and its future prospects. CBZ Bank Limited Managing Director’s Report (continued)

Corporate Social Responsibility

The Bank continues to invest in corporate social activities which is one of our core values. The CBZ Bank staff have also embarked on self-initiated philanthropic social activities, with staff members contributing many hours of volunteering in their respective communities as well as providing resources to assist the needy.


I extend my appreciation to our valued clients, the Board, Management, staff and all other stakeholders, for the continued support that has enabled us to achieve this performance.

P Zimunya
Managing Director
25 February 2016

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