The Group presented a decent set of financials given sub inflation interest rates for much of the period. Total income for the bank increased 710% y/y from ZWL$11.41bn in 1H21 to ZWL$92.44bn for 1H22 mainly driven by revaluations on investment properties which were up 9,503%. Interest income went up 283% y/y from ZWL$3.76bn to ZWL$14.39bn on the back of interest rate repricing and a 90% increase in the loan book. The Agro Business continues to make up 51% of the loan book while commercial loans make up 32%. Of interest is the 25% growth in US$ denominated loans and advances to customers suggesting a shift towards the foreign currency business. The bank’s NPL ratio is estimated at 0.7% against the banking industry average of 1.5% as of June 2022. Non-funded income grew 751% y/y from ZWL$9.27bn to ZWL$78.89bn driven by fair value adjustments on investment property and unrealized foreign currency gains. Operating costs were up 302% y/y primarily driven by staff costs (up 565%). However, cost to income ratio moderated to 21% from the 1H21 position of 42%. The Group registered a 887% y/y growth in PAT from ZWL$3.83bn in 1H21 to ZWL$37.88bn in 1H22. The loan book was primarily short term with 91% of loans maturing within 12 months, in line with the financial sector’s cautious approach to long term lending. Total deposits closed half year at ZWL$288.68bn, up 120% y/y implying a loan to deposit ratio of 59%, up from the December position of 41% (1H21 ratio was 39%). Included in the deposits are legacy liabilities of US$50.79mn (US$50.83mn as at December 2021) and nostro gap accounts of US$82.72mn (US$94.21mn as at December 2021). Foreign denominated liabilities, which are payable on demand, are subject to the special settlement arrangement with the RBZ, wherein the RBZ will provide foreign currency gradually to CBZ at an exchange rate of 1:1. As of June 2022, US$37.96mn had been made available under the arrangement.
