CHAIRMAN’S STATEMENT
Operating Environment
The first half of 2024 was marked by significant economic challenges, including high inflation, weakening local currency and severe drought conditions. During the first quarter of 2024 the local currency (ZW$) depreciated against the US Dollar by about 71.9% between the 1st of January 2024 and the 31st of March 2024, on the official market. However, following the introduction of a new currency on 5 April 2024, relative stability was restored and the local currency’s rate of depreciation against the USD decelerated significantly to only 0.01% between the period 5 April 2024 to 30 June 2024.
Erratic energy supply, drought brought on by El Niño, strict monetary and fiscal policies intended to stabilize the newly launched Zimbabwe Gold (ZWG) currency, as well as external economic forces, all decreased economic performance. The business environment was difficult in light of these factors. However, the release of the 2024 Monetary Policy measures have shown commendable stability in the economy and Group continued to take opportunities presented in the market.
Group Performance
Our financial results for the half year ended 30 June 2024 reflect the Group’s resilience amidst a challenging economic landscape. Despite a 61% decline in profit after tax, the Group maintained profitable, posting a profit after tax (PAT) of ZWG1.06bn in June 2024 from ZWG2.725bn in June 2023. The Group’s profit performance is discussed in greater detail by the Group Chief Executive Officer (GCEO) in his report.
Capital Requirements
All Group companies, except ZB Building Society, met the minimum capital requirements, plans are underway to address the shortfall.
Dividends
There was no dividend declared for the period under review, as the Group chose to retain earnings investing in a core banking system, a critical and long term investment in its digital transformation strategy.
Compliance & Regulatory Issues
The Group is addressing a corrective order by Reserve of Bank of Zimbabwe (RBZ) to rectify the capital shortfall at ZB Building Society by implementing the resolution made by ZBBS shareholders to surrender the banking operating license to RBZ.
Sustainability and Environmental, Social, and Governance (ESG) Reporting
The Group’s strategy and operations remain firmly guided by sustainability principles. The Group continues to pursue certification under the Sustainability Standards Certification Initiative [SSCI], as one of 14 financial institutions in Zimbabwe seeking this sustainability certification, as guided by the Reserve Bank of Zimbabwe. Certification, which will be awarded by the European Organisation for Sustainable Development (EOSD), is now targeted for the current year, FY2024. This is discussed in greater detail in the GCEO’s Statement.
Tied to the Group’s sustainability drive, the Group has now adopted Environmental, Social and Governance (ESG) Reporting, with a detailed and comprehensive inaugural ESG Report forming part of the published FY2023 Annual Report.
Directorate
Mr. L Zembe resigned from the Board on 12 April 2024. On behalf of the Board and management, I would like to extend my gratitude for his contributions and leadership during his term of office. I wish him success in his future endeavours.
The regulators approved my appointment as substantive Chairman of the ZBFH board effective 4 July 2024.
Outlook
Growth for the domestic economy has been revised downwards to 2% in 2024 [Government of Zimbabwe forecast], on the back of worse than anticipated impact of the El-Niño phenomenon, as well as depressed international commodity prices. On the positive, the 2024/2025 agriculture season is anticipated to be characterised by normal to above-normal rainfall patterns, and 2024 growth is projected to be 5%.
The Group will focus on achieving its year end targets, enhancing lending capacity, and preserving the value through balance sheet hardening.
Conclusion
I remain grateful to our valued customers and other key stakeholders, without whom the Group would not have been able to maintain its profitability in this challenging operating environment. Furthermore, I extend my gratitude to Board colleagues, Management and Staff, whose collective contributions enabled the Group to continue sustaining its operations up to and including the half year period to 30 June 2024.
A Makamure
Chairperson
30 August, 2024
DOWNLOAD: ZBFH Unreviewed 2024 Condensed Interim Financial Results.pdf
