Zimpapers Logo

Oliver Kazunga Senior Business Reporter
ZB Financial Holdings has cut down its workforce from 1,042 as at December 31, 2014 to 936 as at the end of January to reduce operating costs.“The total group staff complement stood at 1,042 as at December 31, 2014 comprising 810 permanent and 232 contract employees. Following the completion of the re-sizing exercise on January 31, 2015 the group staff complement came down to 936 made up of 715 permanent employees and 221 contract employees,” group chairman Thamsanqa Mpofu said.

The group said while cordial industrial climate relations prevailed throughout the year, anticipation of a tight operating environment in the short to medium term compelled it to adopt austerity measures to remain afloat.

As a result, Mpofu said, loss making operations were discontinued while a right sizing and re-orientation exercise saw the disengagement of staff and out sourcing of non-core activities.

“The measures were taken to make the group leaner and more efficient and resulted in significant front-loaded costs that have had an impact on the operating results for 2014,” he said.

In the same note CEO Ronald Mutandagayi said the combined effect of staff disengagement expenses ($12.8 million), discontinued operations ($1.2 million) and allowances for loan impairment ($7.7 million) resulted in the group posting a net loss of $9.8 million for the year.

“This compares against a restated loss for the prior year of $0.3 million. Outside of the above stated expenses, the group’s outturn would have been profit of $2 million barring the increase in loan impairment provisions,” he said.

The group’s net interest income decreased by nine percent from $21.6 million to $19.6 million while allowances for loan impairments increased by 344 percent to $7.7 million.

During the period, the group’s net earnings for carrying credit risk reduced by 40 percent.

Driving the above activity, the underlying funding deposits increased by 12 percent from $218.6 million to $243.8 million while mortgages and advances were restricted to a nine percent increase from $131.7 million to $143.9 million.

The financial group said loans to deposit ratio closed at 59 percent, softening slightly from the 60 percent as at the end of 2013.

Correspondingly, liquidity ratios were maintained above 38 percent throughout the year and stretching the ratios.

However, Mutandagayi said the group was inclined more towards prudence in the absence of a functional lender of last resort facility.

Net insurance premiums increased seven percent from $8 million to $8,5 million.

This was a result of increased new business acquisitions in the life operations, which more than offset the increase in benefit payouts while reinsurance operations managed to sustain business renewals at the same time of premium and profitability.

During the period under review, the group’s recurring costs reduced by one percent from $57.8 million to $57 million with further savings being expected in 2015.

The group’s total assets increased by 10 percent to close the year at $383.1 million while total capital for the group reduced from $77.9 million to $68.5 million as a result of loss outturn for the year.