Oliver Kazunga, Senior Business Reporter
ZB Financial Holdings says it has resolved its long standing dispute with Transnational Holdings Limited (THL) over the control of Intermarket Holdings Limited.
In October 2006, the Group adopted a new monolithic brand and formally changed its name to ZB Financial Holdings Limited. This change was also meant to coincide with the merger with former Intermarket Holdings units, namely (Intermarket Bank, Intermarket Building Society, Intermarket Reinsurance, Intermarket Life and Intermarket Bank Zambia), which units have since adopted the ZB brand.
In its audited financial results for the year ended December 31, 2016, ZB Financial Holdings said the resolution would see THL emerging as a significant shareholder in Intermarket Holdings.
“Substantial progress has been made in resolving the long-standing dispute between the company and THL, a former controlling shareholder of Intermarket Holdings Limited (IHL).
“THL has been challenging the acquisition of IHL by the group since 2007,” said ZB Financial Holdings.
The resolution framework that was brokered by the Government, it said, would see THL emerging as a significant shareholder in IHL taking over a substantial part of the shareholding previously held by the Government.
The group also said its removal from the list of Specially Designated Nationals maintained by the Office of Foreign Assets Control (OFAC) of the United States’ Treasury Department, was a milestone that opens trading opportunities in international markets.
ZB Financial Holdings was removed from Specially Designated Nationals listing by OFAC on October 4, 2016.
“The above developments augur well for the development and maintenance of confidence in the group. A strategic re-orientation programme is underway and should see the group strengthening its capacity going forward,” it said.
During the period under review, ZB Financial Holdings’ net revenue increased by 12 percent to $65,1 million compared to $57,9 million in the prior year.
Its net loan recoveries at $0,8 million account for a $3,7 million turnaround from a net impairment charge of $2,9 million posted in 2015.
“In similar fashion, fair value adjustments, driven largely by the performance of listed equities, turned around from a negative of $1,4 million to a positive of $0,2 million, an upswing of $1,6 million.”
Net interest and related income remained flat at $16,7 million with a short-term margin trading contributing 50 percent of that outturn.
“A four percent reduction in gross insurance premiums from $31 million to $29,8 million was largely a result of an eight percent reduction in short-term insurance business arising from risk rebalancing initiatives,” said the group.
Aggregate net insurance premiums, however, increased marginally by four percent from $8,5 million to $8,8 million showing the impact of a combined better claims outturn and managed business mobilisation commissions.
The group’s operating expenses increased by seven percent from $46,3 million to $49,5 million, spurred by the higher depreciation and amortisation charges related to the investments in technologies.
It said 2016 was fraught with adverse factors, which constrained performance momentum. Such factors included weak credit absorption capacity, which slowed down asset growth and the capping of interest rates and fees, which reduced earnings margins.