OLD Mutual Zimbabwe Limited recorded a 41% increase in
revenue to US$1,4 billion in the full year to December 2018 from US$991 million
in 2017 due to growth in investment gains and banking interest income.
In a statement accompanying the company’s financial
results, chairman Johannes Gawaxab said net interest income was up 19% from a
combination of growth in loans and advances, as well as an improvement in net
interest margin driving after-tax-profit to US$49,2 million from US$42,1
million in 2017.
Net non-interest income grew by 13% due to continued use of
card-based and electronic banking platforms as alternatives to cash.
Operating profit was up 23% to US$79,2 million from US$64,5
million the prior year, driven by profit growth in the life, banking and asset
management businesses.
Operating and administration expenses dropped by 3% to
US$91,4 million from US$93,8 million in the comparative year due to various
cost initiatives implemented by management in response to the difficult
operating environment.
Gawaxab said funds under management were up by 52%from
US$42,1 million at the beginning of the financial period to US$4,1 million as
at December 31, 2018 due to growth in net client cashflows and positive
investment performance.
“The unavailability of foreign currency to fund imports for
businesses, as well as the safe haven demand for hard currency and equity
exposures as a mitigant against fears of a return to high inflation levels last
seen in the pre-dollarisation era, caused significant pricing, incomes and
asset valuation distortions in the market.”
“To protect client portfolios from the risk of loss of
value emanating from the monetary policy and associated uncertainties, the
group deliberately took overweight position in non-monetary assets. By December
31, 2018, consumer inflation had surged to a post-hyperinflation peak of 42%,”
he said.
“Going forward, the overall pace and magnitude of
macro-economic revival is likely to depend significantly on the government’s
ability to sustainably rebuild public and investor confidence, bring spending
under control, as well as to re-engage successfully with the international
community,” he said.
Old Mutual Zimbabwe Limited is a 75%-owned subsidiary of
Old Mutual Zimbabwe Holdco Limited which is a wholly-owned subsidiary of Old
Mutual Limited registered in South Africa. Newsday
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