ZB's TB holdings up 25%

Published: 03 May 2019
Half of ZB Financial Holdings Ltd's Treasury Bills (TBs) will mature in the current financial year and the institution will increase its stock of the paper as it becomes available, chief executive Ron Mutandagayi said.

He said the group will hold the remaining paper as a valuable asset class.

Although TBs are currently scarce in the market, his group is still keen to invest in fixed-income securities given they are less risky than lending, he explained.

In full-year 2018, ZB's TB holdings grew by 25% to US$194 million from US$155 million in 2018, achieving a value-weighted yield of 10,08% which was comparable to the gross earning rate of the loan portfolio. The group's minimum lending rate averaged 10% during the year. Mutandagayi told businessdigest this week on the sidelines of an analyst briefing in Harare that in FY2018 the government has been able to honour its TB obligations.

"Our treasury increased during the course of this year. Half of the TBs will mature in the current financial year.

For the TBs that have matured, government has been able to honour those maturities. We think that it's still an asset class that we are still considering under this environment. In terms of numbers, our TBs are standing at US$194 million, up from US$155 million. What I can say to you at the moment is the market is somehow tight and it's not easy to find TBs at the moment," he said.

He added that in the current economic environment, the bank was looking at yields for primary issues and, if the yields are attractive or better, the group would opt for that compared to lending.

"On discounts, if they are attractive we will certainly be looking at acquiring those assets," he said.
- the independent
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