Zimbabwe’s largest bank’s profit drops

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HARARE – Zimbabwe’s largest bank, CBZ Holdings, on Thursday reported a 13 percent drop in first-half profit, hit by slower growth in the domestic economy and a decline in fee income.

CBZ, which is involved in commercial banking, mortgages, asset management and insurance in the southern African country, said after-tax profit for the six months to end-June totalled $16 million, down $18.3 million a year earlier.

CBZ said it was squeezed by lower income from fees after Zimbabwe’s banks agreed to cut customer fees. It was also hurt by slower economic growth.

Outgoing Finance Minister Tendai Biti last month cut this year’s growth forecast to 3.4 percent from an earlier 5 percent saying disputes over the result of a 31 July election would likely hurt the economy.

President Robert Mugabe’s Zanu-PF resoundingly won the election amid charges of fraud by rival Prime Minister Morgan Tsvangirai. Mugabe, already Africa’s oldest leader at 89, has secured a five-year extension to his 33 year rule.

CBZ’s chairman told an analyst briefing the bank was anxiously waiting for the appointment of a new cabinet to get a clearer direction of economic policy.

Zimbabwe’s stock market plunged 11 percent on Monday, the first trading day since Mugabe was re-elected. The $5 billion bourse has continued to fall since then, reflecting investor concerns he will target foreign-owned businesses.

In his first comments after the election victory, Mugabe told Zanu-PF party members on Thursday he will press ahead with the transfer of majority shares in foreign owned companies, with banks likely to be the next major target after mines last year.

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