CHAIRMAN’S STATEMENT
I am pleased to present the performance of the Group for the year ended 31 December 2022. The Group delivered strong financial results despite the domestic economic challenges.
Operating Environment
The domestic economy is estimated to have grown by 4% in 2022, underpinned by output growth in mining (10%), construction (10.5%), and accommodation and food services (56.3%). The country benefitted from an above average agriculture season, which culminated in good output in key crops, including wheat and tobacco. Furthermore, the economy registered significant improvements in foreign currency receipts, upwards of US$11.6bn according to the Reserve Bank of Zimbabwe (RBZ). Export earnings and Diaspora remittances were amongst the major contributors of the record foreign currency receipts achieved in 2022. Partly as a result of the improved foreign currency receipts, and in part as a result of continued depreciation of the local currency, the economy recorded an increase in the use of USD currency for trade, with the RBZ estimating that close to 70% of transactions are now being conducted in hard currency. Meanwhile, annual inflation remained high during the year under review, rising from 60.6% in January 2022 to 243.75% as at December 2022. There was however an improvement in month on month inflation which rose from 5.3% in January 2022 to a peak of 30.7% in June 2022, before progressively reducing to a yearly low of 1.8% in November 2022 and ending the year at 2.4% in December 2022.
Group Performance
The Group posted a profitable performance for the year. This is detailed in the Group Chief Executive Officer’s report.
Capital Requirements
As at 31 December 2022, all Group companies, with the exception of ZB Building Society, were in compliance with prescribed minimum capital requirements. The Group is still working to consolidate all its banking operations under one license, that is, merging ZB Bank Limited, ZB Building Society and Intermarket Banking Corporation.
Dividends
The Board has declared a final dividend of ZW837.49 cents per share for the year ended 31 December, 2022. This brings the aggregate dividend for the year ended 31 December 2022 to ZW914.67 cents per share. A separate dividend notice will be published to this effect.
Compliance & Regulatory Issues
The Group dealt with all governance issues which were the subject of a Corrective Order issued by the Reserve Bank of Zimbabwe (RBZ) on 7 March, 2017 and reviewed in March 2018, and the Corrective order was lifted on the 9th of December 2022, after a satisfactory review by the regulator.
Sustainability
The Group embarked on a journey of integrating sustainability into its business value chains. The integration goes beyond the current process of attaining the Sustainability Standards Certification Initiative (SSCI) by the European Organisation for Sustainable Development (EOSD). Our goal is to ensure sustainability is fully embedded in our products and services, operations, how we engage with our clients, and business relations. Sustainability will now define how ZB Financial Holdings does business going forward.
Directorate
Mr K. Maukazuva resigned from the Board on 31 August 2022. I would like to extend my gratitude and appreciation to him for his distinguished service to the Group.
Mrs Georgina Chikomo, resigned from the Group with effect from the 1st of September 2022. She was the Managing Director for ZB Bank Limited. I wish Mrs Georgina Chikomo success in her future endeavours.
In her stead, Mr Elisha Chibvuri was appointed as the new Chief Executive Officer for ZB Bank Limited.
The Group underwent an organisational transformation program, which led to a restructure of the organisation.
The Group is now made up of three main clusters, namely Banking, Investment and Insurance Clusters. The following appointments were made for the Chief Executive Officers of the Clusters:
Elisha Chibvuri – Banking Cluster; Tandiwe Masunda – Investments Cluster; and Letwin Mawire – Insurance Cluster.
I pledge the Board’s support to Mr E. Chibvuri, Ms T Masunda and Mrs L Mawire and wish them enjoyable and successful terms of office.
Outlook
In the outlook, the domestic economy is projected to grow by 3.8% in 2023, underpinned by growth in output from the mining, construction, agriculture and accommodation (tourism) sectors. The envisaged growth is mainly premised on normal to above normal rainfall patterns and optimal distribution thereof, favourable international commodity prices, continuance of tight monetary and fiscal policies to engender stability, as well as continued slowdown in inflation, among other factors.
Downside risks to the attainment of projected economic growth outturn for 2023 relate to effects of power shortages and load shedding on production, the continued effects of disruptions in global supply chains and rising global inflation, uncertainty and potentially destabilising effects of the 2023 harmonised national elections, monetary instability (exchange rate depreciation and inflation), unreliable rainfall patterns and distribution, among other factors.
The Group will continue to focus on revenue growth and cost optimisation strategies with an overall aim of growing and strengthening the balance sheet position. The Group will continue with its Organisational Transformation Programme focusing more on improving the effectiveness and efficiencies of back-end systems.
Conclusion
I would like to express my appreciation to our valued customers and all key stakeholders, for the continued support to the ZBFH Group. I extend my gratitude to Board colleagues, Management and Staff, without whose collective contributions the Group would not have been able to achieve the 2022 performance.
P. Chiromo
Chairman
19 April, 2023
