ZBF Holdings gross insurance premiums up 7% in Q1, 2021

ZBF Holdings gross insurance premiums up 7% in Q1, 2021

Staff Reporter

HARARE, ZB Financial Holdings group gross insurance premiums increased by 7% with the related insurance expenses reducing by 11 percent between first quarter 2021 and first quarter 2020.

ZB Holdings insurance units include ZB Life and ZB Re and the group has over the years been looking at setting up offshore insurance services.

“The net insurance income increased overall by 100 percent reflecting the combined effect of increased business and further improvement in risk selection,” the group said.

This comes as the group is also looking merging its bank and building society by year end with the plans having spanned for more than eight years.

In 2014, ZB Financial Holdings (ZBFH) board approved the group’s merger of two units and the merger was to ensure compliance with the minimum capital requirements for both the bank and the building society.

“The merger of ZB Bank Limited and ZB Building Society is expected before year end and is a key part to the capital management plan,” the group said.

It noted that for the quarter under review, the group’s asset quality remained good with a non-performing loan ratio of 0,39 percent, compared to the December 2020 level of 0,68 percent.

He said total assets for the trading period under review increased 11 percent to $22,9 billion from $20,5 billion in December 2020.

“The growth of assets was supported by a 19 percent increase in deposits and other funding accounts from $7, 9 billion as at December 31, 2020 to $9, 5 billion as at March 31, 2021, following money supply trends on the market,” the group said.

Income earning assets constituted 54 percent of the total assets. He noted that the group maintained an aggregated liquidity ratio above 70 percent which was adequate to accommodate short term fluctuations in customer demands.

“Loan book increased by 15 percent as the group continued to increase its participation in supporting the growth of the economy.”

The group noted that following a 58 percent reduction in   exchange   income, total income for the first quarter 2021 reduced 10 percent to $1,3 billion compared to $1, 5 billion posted in first quarter 2020.

The company noted that foreign  exchange  earnings  dominated  total income in 2020, driven by the  wide  movements  in  the  official exchange rate as authorities attempted  to  stabilize  the  market.

During the quarter under review, net interest and trading income increased by 194 compared to first quarter 2020 on the back of a 15 percent increase in the loan book and trading assets.

“An average interest margin of 27 percent was achieved for the quarter, showing an increase from 15 percent during the 2020 quarter and the increase reflects only a partial offset against inflation,”

Banking commissions increased by 44 percent against the background of a 12 percent increase in the number of accounts.

However, there was a 21 percent reduction in the aggregate number of transactions between first quarter 2021 and the comparable period in 2020.

Operating expenses increased by 47 percent from $575,7  million  in the first quarter 2020 to  $844,0 million in the first quarter 2021.