ANALYSIS| CABS Half Year Profit Quadruples on Strong Lending and Digital Growth

By ETimes

HARARE –  THE country’s largest building society, CABS, has reported a stellar set of results for the half year ended 30 June 2025, highlighting the resilience of its business model in a volatile operating environment.

In the review period, CABS’ profit after tax surged to ZWG396.53 million, more than tripling the ZWG110.43 million earned in the corresponding period of 2024. The sharp rise was supported by stronger revenue streams, improved lending activity, and disciplined cost management.

A key driver of this performance was net interest income, which climbed to ZWG421.69 million from ZWG78.96 million a year earlier, representing more than a fivefold increase. This growth was achieved through higher loan volumes and more effective asset-liability management. Complementing this, net fee and commission income rose by 88.8% to ZWG647.89 million, reflecting greater uptake of digital banking services and stronger transactional activity across customer segments. Collectively, operating income jumped to ZWG1.30 billion from ZWG407.51 million in the prior period, demonstrating the effectiveness of the Society’s revenue diversification strategy.

Operating expenses, however, remain an area of concern. Costs more than tripled to ZWG768.34 million compared to ZWG249.56 million in 2024, driven by exchange rate pressures, rising staff costs, and higher administration expenses. While the cost increase narrowed the operating margin, strong revenue growth ensured that profitability remained intact. Maintaining cost discipline in a high-inflation, currency-sensitive environment will be crucial to sustaining earnings momentum.

The balance sheet continued to strengthen, expanding by 18.3% to ZWG15.22 billion from ZWG12.86 billion at year-end 2024. Loans and advances rose 37% to ZWG6.78 billion, underscoring CABS’s growing role in financing the productive sectors of the economy. Deposit liabilities also increased by 26% to ZWG7.87 billion, reflecting improved customer confidence and deepening financial intermediation. Credit lines expanded to ZWG1.83 billion, highlighting continued access to external funding partners.

Notably, credit quality improved despite the sharp loan growth. Expected credit losses fell by 8%, suggesting stronger risk management practices and a healthier loan book. This points to cautious lending strategies and effective monitoring of borrower performance, both of which are essential in a still-fragile macroeconomic environment.

Shareholders’ equity rose to ZWG4.81 billion from ZWG4.33 billion at year-end, reinforcing the Society’s capital base and capacity to absorb shocks. Liquidity remained healthy, supported by strong deposit mobilisation and diversified funding lines. Meanwhile, digital transformation initiatives, including the rollout of corporate internet banking, instant digital account opening, and expanded mobile services, continued to drive customer uptake and broaden revenue channels. Our thoughts: The half-year results highlight a bank that is growing stronger on multiple fronts—profitability, asset growth, and digital adoption. The challenge going forward lies in balancing cost pressures with the need to maintain momentum in lending and innovation. If managed well, CABS is well positioned to consolidate its leadership in Zimbabwe’s financial sector.