eBusiness Weekly
Kudzanai Sharara
Financial services group CBZ Holdings, says the outcome of ongoing investigations by the US Treasury Department’s Office of Foreign Assets Control (OFAC) regarding historical transactions involving a party that was subject to OFAC economic sanctions, will not “create a dent” on its viability and going concern status.
The country’s biggest financial institution with more than $2,5 billion in total assets, is subject to OFAC investigations, where it is alleged to have perpetrated 15,127 violations of US sanctions on Zimbabwe.
Initially, OFAC had put the penalty at $3,8 billion before revising it downwards to $385 million, but the Zimbabwe Stock Exchange listed entity, which is currently trading under a cautionary regarding the matter, said the penalty, if it comes, might not be material.
Chief executive officer, Blessing Mudavanhu, told analysts at the company’s results briefing for the six months to June 2018 that the financial institution is yet to find out when the matter will be finalised and how much the penalty would be.
“All we know is that we have presented our arguments and our local and external legal counsel are seized with the matter,” said Mudavanhu
Chairman, Noah Matimba, said the financial services giant is very positive that this matter will not in any way create a dent.
“We don’t think it would be material, but more importantly, the position that we see now we believe is even better than the position we were a year ago by virtue of the sentiment that are coming along and we did mention at our last interaction that we are working together with our governor (Dr John Mangudya) and the Ministry of Finance and Economic Planning such that this matter is handled at an even higher level.”
Matimba said as a result sentiment with regards the “accusations” is positive although nothing has been written off as yet.
“All we can give you is that the matter will finally be resolved amicably,” Matimba said.
Questioned on whether the bank had made any provisions for a possible penalty, financial director Colin Chimutsa, said it’s not possible to make general provisions.
“General provisions are no longer allowed, all provisions are now specific and in our case unfortunately we cannot estimate by whatever means what would be the fine.
“Like what the chairman said, we even don’t know the outcome, we hope for the best,” he said.
His boss, Mudavanhu added that there is no accounting basis to make provisions based on accusations.
By nominal numbers CBZ is Zimbabwe’s most profitable bank having made $34,3 million in profit after tax for the six months to June 2018, up from $11,9 million prior year comparative.
