ZB resumes international business

ZB resumes international business
Published: 10 August 2017
FINANCIAL services group, ZB Financial Holdings, has resumed international business after it was removed from the United States of America sanctions list last year, group chief executive officer, Ron Mutandagayi has said.

ZB, which was placed under sanctions in 2008, was removed from the list by the United States Department of Treasury's Office of Foreign Assets Control (OFAC) in October.

The Zimbabwe government, placed under western sanctions over a decade ago for alleged human rights violations and electoral fraud, is a significant shareholder in ZB, with a 24 percent direct stake.

Mutandagayi disclosed that the bank has re-established correspondent banking accounts in four currencies, namely the United States dollar, the rand, the euro and the British pound.

"We are now able to conduct international business following the removal from sanctions on October 4, 2016," Mutandagayi told The Financial Gazette.

"Corresponding bank accounts in United States dollars, South African rands, euros and British pounds have been reopened and are functional and transactions are now going through," he said.

ZB and several other Zimbabwean companies were included on the list of specified individuals, resulting in the seizure of millions of dollars for a few affected firms.

The inclusion of ZB on the sanctions list meant that the bank could not participate on international financial markets.

American institutions are also prohibited from engaging in business transactions with listed entities.

Now, the removal of sanctions, which had severely undermined the bank's operations and hampered its efforts to attract investors, will now allow it to source offshore funding.

Meanwhile, Mutandagayi said the group's insurance unit, ZB Life, was developing a new system which would allow insurance agents to be able to conduct business from clients' offices.

He said: "A new policy administration system for ZB Life is being installed. This new system will have a mobility module that will allow insurance agents to write business from clients' offices. We will be the first insurance company to use a mobility module."

In its financial results for the year to December 31, 2016, ZB recorded a profit of $11,43 million, up 22 percent from $9,36 million realised the previous year.

Non-funded income remained the major income earner, with the non-interest income ratio standing at 73 percent at the end of December 31, 2016 compared to 76 percent recorded the previous year.

The interest income ratio stood at 27 percent in 2016 compared to 24 percent reported in 2015. The increase was due to increased trading in treasury bills (TBs).

The loss of interest income from lending activities was compensated by the earnings from the TB portfolio to achieve a flat net interest outturn.

The financial results showed a 15 percent growth in TBs from US$99,3 million recorded in prior year to US$117,5 million during the reporting period.

This was attributed to purchases in the secondary market in order to maximise short-term returns.
- fingaz
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