CBZ Holdings capitalizes insurance unit

CBZ Holdings capitalizes insurance unit

Staff Writer

CBZ Holdings says it has availed appropriate funding to its insurance unit, CBZ Insurance, to regulise the unit’s compliance with the regulatory minimum capital requirement.

As at Q1, 2020, the insurance unit, together with Redsphere Finance were among the group’s subsidiaries which had regulatory capital shortfalls.

“During the period, group’s subsidiaries were in full compliance with the regulatory minimum capital requirement except for CBZ Insurance and Redsphere Finance which had regulatory capital shortfalls of $12 million and $2  million respectively, at the end of the Quarter.

“However, the group managed to regularise these shortfalls by availing appropriate funding to the two subsidiaries during the month of April 2020,” the financial services group said in a trading update.

In the report, CBZ anticipates the operating environment to remain fraught with increased uncertainities emanating from effects of COVID 19, although these have had minimum effects on group operations.

“Going into the second quarter of the year, the operating environment is expected to remain fraught with increased uncertainties emanating from the effects of the outbreak and attendant measures to fight the virus,” CBZ said.

The country’s largest diversified financial services group, said it has assessed that COVID-19 will not have an inhibiting impact on its financial activities and position as most of its services and business activities have been and can be migrated to online platforms.

“The Group is therefore envisaged to continue as a going concern despite its possible effects,” it noted.

During the period under review, the group’s total assets grew to $29 billion compared to $20 billion during the same period last year.

The group noted that transactional volumes declined during the lockdown period as a result of the restriction in movement and the requirement that only essential services be allowed to operate during this period.

The financial services group said borrowers, especially those that are in the hardest hit industries such as Tourism and Hospitality have had their businesses affected and consequently, their ability to service debts.

“The group’s level of exposure within the Hospitality and Tourism Sector which has been hardest hit by the effects of the outbreak, constitutes about 0,68 percent and hence, the group is unlikely to suffer significant losses due to non-performance of borrowers in this sector.”

During the period, deposits were at $20 billion compared to $16 billion in same period comparable last year, as advances grew to $5 billion.

After tax profit grew significantly to $312 million from $82 000 last year same period comparable.