ZB Financial Holdings says it will focus on transactional banking rather than lending in the current economic environment with high private sector loan defaults, as it looks to reduce its loan book and non-performing loans; while the economic situation improves, the group chief executive says ZB Financial Holdings will continue to deliberately reduce its loan book and move towards more of a transactional banking model to avoid further non-performing loans. ZB Financial Holdings was able to lower its non-performing loan ratio from 29% to 20% last year partly due to debt transfers to the Zimbabwe Asset Management Corporation and recoveries of bad debts.

1. By Tawanda Musarurwa
HARARE – ZB Financial
Holdings says it will increase
lending once the economy
improves, but will focus
on a transactional banking
strategy in the meantime as
private sector loan defaults
remain high.
In addition to transfer of bad
loans to the Zimbabwe Asset
Management Corporation
(ZAMCO), ZBFH said it would
continue to deliberately thin
down its loan book.
“We are moving to a more
transactional form of bank-
ing, rather than lending,
and this is to run away
News Update as @ 1530 hours, Wednesday 23 March 2016
Feedback: bh24admin@zimpapers.co.zwEmail: bh24feedback@zimpapers.co.zw
ZBFH thins out loan book as private sector defaults
Mr Ron Mutandagayi
......as group returns to
profitability

2. from non-performing loans,”
group chief executive Mr Ron
Mutandagayi told analysts
this morning.
“It’s easy to resume lending
when the economic situation
turns around,” he said.
Consequently, ZBFH’s total
advances for the year ended
December 31, 2016 was 32
percent lower at $100 million
from $146 million in 2014.
And the financial services
firm’s credit assets reflect
a reducing pace since 2011
as general credit absorption
capacity in the private sector
weakened.
A sectoral analysis of ZBFH’s
loans and advances shows
that last year the mining and
manufacturing sectors were
particularly culpable for loan
defaults.
“Bad debt recoveries in the
mining and manufacturing
sectors, write-off in most
sectors and renewal of loan
facilities at relatively lower
levels resulted in a lower
loans and advances book,”
said Mr Mutandagayi.
For FY2015, the decline in
the loan book was largely
attributable to declines in
short-term loans and Bankers
Acceptances.
Short-term loans last year
amounted to $73,3 million,
down from $95 million in
2014, while Bankers Accept-
ances declined to $6,7
million from $31,2 million
in the prior year. Mortgage
loans also declined – albeit
marginally from $12,7 million
in 2014 to $12,3 million last
year.
However aided by ZAMCO
and recoveries of bad debts,
ZBFH’s NPL ratio declined
from 29 percent in 2014 to
20 percent last year.
The chief executive said
ZAMCO provided credit relief
to the group with treasury
bills worth $13,6 million.
The rescued assets were
largely in the mining sector
at 88 percent ($12 million),
with the manufacturing sec-
tor accounting for 12 percent
($1,6 million).
Meanwhile, for the year just
ended, ZBFH yielded total
income amounting to $56,7
million, while profit before
tax amounted to $9,4 million
on the back of cost ration-
alisation measures that the
group has been implementing
over the last couple of years.
The group said all its strate-
gic business units operated
profitably during the period,
except the Assurance busi-
ness.
“The loss in the Life Assur-
ance segment is a result of
a revaluation of underlying
assets which is not expected
to recur in FY2016 going for-
ward,” said Mr Mutandagayi.
The group declared a divi-
dend of 0,54 cents per share
for the full-year.●
2 news

3. BH243

4. BH244

5. By Munesu Nyakudya
HARARE -Government will
next week cancel licences for
foreign firms that have not
complied with the Indigeni-
sation law, the Minister of
Youth Development, Indig-
enisation & Empowerment
Patrick Zhuwao has said.
Speaking at a press confer-
ence this morning Minister
Zhuwao said the Cabinet
sat on March 22 and unan-
imously passed this resolu-
tion.
“It is 23 March 2016, three
months into 2016 and
businesses have continued
to disregard Zimbabwe’s
indigenisation laws, as if
daring our President and his
Government to do something
about their contemptuous
behavior”.
“Cabinet has directed that
on April 1, 2016 all Minis-
ters invoke Section 5 of the
Indigenisation and Economic
Empowerment Act (Chapter
14:33) against all non-com-
pliant businesses in their
sectors,” he said.
He added that the process
will involve the line minis-
ter issuing an order to the
licensing authority to cancel
the licenses and then notify
the non-compliant business
in writing of the intention to
cancel licenses.
The non-compliant business
will then be allowed to show
the just cause why their
license must not be can-
celled.
Minister Zhuwao added that
the line Minister will then
direct the non-compliant
business to become compli-
ant, failure of which the min-
ister will notify parties likely
to be affected and the licens-
ing authority will without
notice cancel licenses after a
30 day notice to comply.●
5 news
02 03
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Non-compliant firms to have licences cancelled on April 1
Minister Zhuwao

6. BH246

7. BH247

8. HARARE– Vice President
Emerson Mnangagwa today
said the Government will
come up with legislation
and measures to ensure the
country is not prejudiced
of potential revenue from
minerals.
The remarks follow revela-
tions by President Robert
Mugabe that the country
could have lost $15 billion in
potential diamond revenue
over the past seven years.
He told delegates at a min-
ing conference that failure
to provide adequate regula-
tions would result in serious
prejudice and plunder of
Zimbabwe’s wealth.
“The lack of a well-de-
fined, effective and globally
bench-marked framework,
legislative and institutional
arrangements regarding
issuance of, management
and handling of mining
investment and provisions
for addressing potential dis-
putes all created loopholes
across the mining sector,
and failed to hold mining
companies to account in
their respective sub-sec-
tors,” he said.
“I believe that future legisla-
tion should take cognizance
of all identified pitfalls and
derive useful lessons from
the chaos and controversies
that had dogged Chiadzwa
diamonds.”
VP Mnangagwa said amend-
ing the Mines and Minerals
Act was one way of dealing
with inadequacies and loop-
holes inherent in the mining
sector.
He said it was also important
to invest in exploration to
determine the full extent of
the country’s mineral wealth.
“As Government, we are
desirous to create a sim-
ple legal regime that puts
emphasis on the role of the
state as a regulator and
creator of enabling environ-
ment for mining investment.
“To engender the process,
the state should provide
geological data and infor-
mation regarding the type
and value of the total min-
eral endowment that the
country possesses,” he said.
VP Mnangagwa said the
mining sector had a crucial
role to play in the economic
recovery of the country.
“I am further convinced that,
value addition and benefici-
ation in mining, alongside a
well-resourced agricultural
sector that is buttressed
by sound farming practices,
could be the panacea for
much anticipated rebound
of our largely agro-based
economy,” he said.-New
Ziana●
8 news
Govt to plug loss of revenue from minerals: VP Mnangagwa
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· Businesses
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10. BH2410

11. HARARE – Farmers have
welcomed the new payment
method for tobacco farmers,
where proceeds from the sale
of their crop would be depos-
ited directly into their personal
bank accounts, saying it will go
a long way in securing their
hard earned cash.
The new system will take effect
this marketing season which
starts on March 31. Previously
banks operating at the auction
floors would dispense cash to
the farmers immediately after
the sale of their crop.
The new development is part of
the Reserve Bank of Zimba-
bwe’s drive for financial inclu-
sion by tapping into the tens of
thousands of registered small
scale tobacco growers.
The RBZ is of the view that an
inclusive financial system facil-
itates mobilization of financial
resources circulating in the
informal sector.
Zimbabwe Commercial Farmers
Union (ZCFU) president Wonder
Chabikwa said the move would
ensure that farmers do not
lose their proceeds to thieves
and unscrupulous dealers who
operate at auction floors.
“This is a brilliant and civilised
way of handling cash as it will
reduce cases where farmers
lost all proceeds to pickpock-
ets, fake dealers as well as
impulse buying,”
He added; “Farmers can now
make decisions on how to
spend their monies as they
will withdraw cash at their own
convenient time.”
Mr Chabikwa said farmers
would also stand a chance to
get loans from their banks
where they would have kept
their monies.
“We urge farmers to open bank
accounts with institutions of
convenience to where they
grow their tobacco,” he said.
The tobacco selling season will
open on March 30 this year
for the auction floors and the
following day for contract sales
floors.
In a joint statement, Tobacco
Industry and Marketing Board
and the RBZ said all proceeds
from the sale of tobacco will be
paid through bank accounts.
“Banks have been engaged
and are going to offer bank
accounts to tobacco growers
at favorable conditions which
include waiving of charges for
maintaining bank accounts.
“As part of Know Your Cus-
tomer requirements, banks will
only require tobacco farmers
to furnish them with their
national identity and tobacco
growers’ number in order to
open a bank account,” said the
two parties.
The TIMB has projected a
decline in in crop size due
to the effects of the El Niño
induced weather conditions.
Last year, almost 200 million
kg of tobacco was produced
earning the country $855 mil-
lion in exports.- New Ziana●
11 news
Farmers applaud new payment method for tobacco farmers

12. BH2412

13. HARARE -The mainstream
industrial index dropped
a further 1.11 to settle at
98.78 as trading activity
remained low.
Seed producer SeedCo lost
a significant $0,1577 to
close at $0,6350 while giant
insurer Old Mutual shed
$0,0007 to trade at $2,0800.
Only two counters also
traded in the positive. Ciga-
rette giant BAT rose $0,0500
to trade at $10,7500 and
Delta Beverages was up
$0,0052 to trade at $0,5650.
The mining index was
unchanged at 19.53 points
as Bindura, Falgold, Hwange
and RioZim all maintained
previous price levels at
$0,0100, $0,0050, $0,0300
and $0,1040 respectively
` - BH24 Reporter ●
ZSE13
Equities extend losses

14. Movers CHANGE Today Price USc SHAKERS Change TODAY Price USc
Delta 0.92 56.50 SeedCo -19.89 63.50
BAT 0.42 1,075.00 Old Mutual -0.03 208.00
Index Previous Today Move Change
Industrial 99.89 98.78 -1.11 points -1.11%
Mining 19.53 19.53 +0.00 points +0.00%
14 zse tables
ZSE
Indices
Stock Exchange
Previous
today

15. 15 DIARY OF EVENTS
The black arrow indicate level of load shedding across the country.
POWER GENERATION STATS
Gen Station
23 March 2016
Energy
(Megawatts)
Hwange 537 MW
Kariba 470 MW
Harare 30 MW
Munyati 0 MW
Bulawayo 18 MW
Imports 0 - 300 MW
Total 1211 MW
• Thursday 24 March 2016 - Annual General Meeting of Willdale Limited; Place: Boardroom, Willdale Administration Block,
19.5km peg Lomagundi Road, Mount Hampden; Time: 1100 hours...
• Analyst briefing - Old Mutual Zimbabwe, Steward Room, Meikles Hotel, March 30, 1430hrs
THE BH24 DIARY

16. LAGOS - Nigeria's govern-
ment will pump 350 billion
naira ($1,76 billion)in the
next quarter into Africa's
biggest economy hit hard
by a slump in oil revenues,
its finance minister said
on Tuesday as parliament
prepares to pass a much-de-
layed budget.
Africa's top oil producer is
grappling with its deepest
economic crisis in years,
brought on by the fall in
crude prices.
President Muhammadu
Buhari presented a record
$30 billion budget in Decem-
ber but asked for its with-
drawal a month later to
make changes after a further
drop in oil prices. The total
budget has not changed but
the deficit has risen to 3 tril-
lion naira from 2,2 trillion.
Giving details of the
amended draft, Finance
Minister Kemi Adeosun said
the government planned to
spend 350 billion naira in
capital expenditures in the
next quarter alone.
"Companies that had laid
off staff and those that had
abandoned projects are
going back to sites and the
economy will bounce back,"
she said in a statement,
without saying how the
spending will be funded.
Senior Nigerian lawmak-
ers said on Tuesday they
expected parliament to pass
the 2016 budget this week,
after a three-month delay
to allow for revisions after a
decline in oil prices. - Reu-
ters●
regioNAL News16
Nigeria plans to spend $1,7 billion in next quarter to revive
economy
Stelios Haji-Ioannou, owner of
easyGroup Holdings Ltd, which
owns the Fastject brand, said in
a letter to the board of Fastjet
Plc that the African budget airline
was in breach of two clauses of
their license agreement.
Haji-Ioannou, who has been
vocal in his opposition of Fastjet's
management, said the carrier's
chairman Colin Child had caused
the company to be in material
breach of its license agreement
with easyGroup.
Haji-Ioannou said Fastjet was
in breach of two clauses of the
agreement, and that it had failed
to inform easyGroup about Fast-
jet's new "accountable manager"
after the exit of former chief
executive Ed Winter.
Fastjet declined to comment on
the matter. It had said last week
that it was taking legal advice on
another letter from Haji-Ioannou.
Haji-Ioannou, who owns a 12,6
percent stake in Fastjet through
easyGroup, said in that letter that
the carrier could go insolvent -
Reuters●
EasyGroup says
Fastjet breached
brand license
agreement

17. With Britain’s referendum on the
European Union exactly three
months away, Bank of England
officials are agonising over the
dangers from a vote to leave.
On Wednesday, Mark Carney will
chair the Financial Policy Commit-
tee’s first formal meeting of the
year -- and its last before Britain’s
June 23 referendum. Just two
weeks after the governor declared
an exit vote as the biggest
domestic risk to financial stability,
officials can now ratify contin-
gency planning for a threat that
has rattled investors enough to
force a plunge in the pound and a
spike in sterling volatility.
Carney’s concerns -- dragged
out of him by lawmakers at a
Parliament hearing -- have since
become a weapon in the highly
charged political battle on EU
membership, despite the gover-
nor’s attempt to remain above
the fray. They suggest how the
issue may dominate this week’s
discussion, overshadowing topics
such as bank capital, housing and
a potential lack of liquidity.
“Without a doubt, Brexit is the top
of everyone’s agenda until June,
and possibly after if we do vote to
leave,” said Alan Clarke, an econ-
omist at Scotiabank in London.
“The FPC’s mandate is the finan-
cial system, so they’ll be looking
at whether banks will be able to
continue to do their business if
there is a vote to leave. They may
also talk about other risks to the
financial sector, whether there
would be an exodus of firms.”
Record-Low Rate
The BOE’s key interest rate has
been a record-low 0,5 percent
for seven years and, with a hike
probably still some time away, the
onus is on the FPC to keep imbal-
ances in check. The central bank
is already drawing up contingency
plans for a British exit from the
EU and will offer extra liquidity to
the financial system around the
referendum.
Chancellor of the Exchequer
George Osborne singled out the
10-member FPC last week in his
budget speech, asking it to be
“particularly vigilant in the face of
current market turbulence.” The
committee will publish a state-
ment from its meeting on March
29.
“The BOE will be considering
where we are in the credit and
economic cycle and what we
need to do to lean into it,” said
Mick Grady, an economist at
Aviva Investors and a former BOE
official. “When rates have been
so low for a very long time, the
cracks start getting a bit wider.”
Risk Amplifier
While the central bank has so far
tried to skirt the Brexit debate,
the FPC, responsible for protect-
ing the resilience of the financial
system, will need to consider the
potential threats. In the past,
sections of its discussions deemed
to be too sensitive were redacted
and released only at a later date.
Asked about Brexit by lawmakers
on March 8, Carney said it’s the
“biggest domestic risk to financial
stability because, in part, of the
issues surrounding uncertainty”
but also because it could “amplify”
other risks.
After this month, the next sched-
uled FPC meeting will take place
on June 28 -- after the referen-
dum -- though some “issues
meetings” may occur before that.
Carney has said he’ll respect a
purdah in the run-up to the vote.
The FPC may also discuss banks’
resilience this week. In December,
officials said they intend gradually
to increase the countercyclical
capital buffer to 1 percent from
zero as the economy recovers.
That divided the committee, with
some saying it was “too soon” for
an increase.
Housing is also likely to feature,
with mortgage lending surging
and prices rising. After the FPC’s
December meeting, Carney cited
the commercial and buy-to-let
real-estate markets, as well as
household debt and the cur-
rent-account deficit, as signs that
stability risks were increasing.
Charles Goodhart, a former BOE
policy maker, has said recent
mortgage figures suggest there’s
“a lot of potential heat in hous-
ing.”
“What the FPC needs to think
about now is about countercycli-
cal capital buffer rises and how
that is going to work, particularly
in the context of how it would
interact with monetary policy,”
said Chris Hare, an economist at
Investec in London. “There are
those ongoing issues in the hous-
ing market, the buy-to-let market
in particular. Those seem to be
the pinch points.” - Bloomb-
erg●
internatioNAL News17
‘Brexit’ fretting at Bank of England may be about to intensify

18. By Frik Els
Driven by low commodity
prices, large mining companies
will shift away from diversifica-
tion strategies to concentrate
on increasing competitiveness
in specific sectors, predicts
research firm BMI.
The process is already under-
way at the top diversified firms
including at number one miner
BHP Billiton which back in 2014
embarked on what it called
“portfolio simplification” to
focus on iron ore, copper, coal
and petroleum and potentially
potash.
Severe debt distress has
prompted a much more radical
overhaul at number five miner
Anglo American where only
three divisions may survive –
copper, diamonds and platinum.
Mines will be cut from 55 to
just 16.
Among its peers Anglo, thanks
in part to a history dating back
more than 100 years in the
world's most well-endowed
mining region, was arguably the
most diversified. But spreading
your risk among many com-
modities achieves little if prices
are falling across the board.
And if Anglo's program to con-
centrate its focus is success-
ful, ironically another kind of
diversification risk will become
apparent – it would earn more
than half its profits from just
one geographical region.
Faced with similar debt pres-
sures Glencore has been shed-
ding billions in assets although
founder Ivan Glasenberg is a
strong believer in diversification
and likes to point out compet-
itors reliance on iron ore com-
pared to the balanced portfolio
of the Swiss trader and world
number four miner.
If Vale finds the buyer for its
nickel operations it has been
seeking, the Rio de Janei-
ro-based company will become
a pure iron ore play like Aus-
tralia's Fortescue Metals. When
prices were higher number
two Rio Tinto relied on the
steelmaking raw material for
three-quarters of earnings. At
BHP it was more than half.
In the report BMI forecasts
that merger and acquisition
activity will pick up over the
next three to five years and
miners’ divestment programs
would continue, but “this would
only be a temporary measure
to improve the companies’
cost structures and increase
operational margins in the short
term”.
Over the longer term miners
would increasingly focus on
core operations and acquire
assets within their field of
operations to drive down costs
and enhance competitiveness.
Capital expenditure will focus
on key brownfield projects and
expansion of existing high-
er-margin business rather
than building new mines from
scratch.¬¬
BMI says small and mid-tier
mining firms will have an even
harder time of it and warns of
the “increasing potential for
an emerging market corpo-
rate debt crisis in 2016, given
the parlous state of high-yield
bonds in the US, rising dollar
interest rates, slow growth
and elevated emerging market
private sector leverage.”
While the negative impact on
mineral supply of this consoli-
dation trend would be positive
for commodity prices, BMI
expects that it would take
longer for resource equities to
come back into favour.
As for the improvement in
market sentiment and the rally
in metal prices since the start
of the year, BMI does not see it
lasting and “commodity prices
would remain low over the
coming quarters on the back
of a persistently oversupplied
market.”
The authors of the report
forecast consolidation among
large global mining companies
and while commodity prices are
likely to bottom this year min-
ers will “increasingly surrender
to a 'lower for longer' price
outlook, which would result in
further significant divestment of
assets, output cuts and bank-
ruptcies.” – Mining.com●
18 analysis18 analysis
The end of the global diversified miner?