Source: CBZ hits historic US$1bn valuation, 2028 profit target in sight – herald
Nelson Gahadza
Senior Business Reporter
CBZ Holdings has breached the US$1 billion valuation mark on the Zimbabwe Stock Exchange, reflecting a sharp rise in investor confidence in the diversified financial services group as management targets US$100 million in annual net profit by 2028.
CBZ chief executive officer Mr Lawrence Nyazema said the group’s market capitalisation had risen from about US$200 million at the beginning of 2024 to levels equivalent to about US$1 billion, following a significant appreciation in its share price.
Briefing analysts while presenting the CBZ’s half-year results yesterday, Mr Nyazema said the group’s share price had increased by almost 250 percent over the past eight months, with the company’s market value rising from about ZiG$6 billion at the beginning of the year to nearly ZiG$25 billion.
“When we started the year, the share was valued at ZiG6 billion and on Friday, we approached ZiG25 billion. When you look at this ZiG25 billion by the ZIG exchange rate, that is almost a billion US$,” said Mr Nyazema.
He said the milestone places greater pressure on the group to translate the higher market valuation into sustained earnings growth, targeting to lift net profit to US$100 million by 2028. Mr Nyazema said the group could not afford to allow its valuation to run ahead of its underlying business performance and that accelerating earnings growth would be critical to supporting the current market value.
“The only way we can defend such levels of valuation is for us to generate value for our shareholders. We have been talking about wanting to lift net profit to US$100 million by 2028. We simply have to establish that growth and ensure that US$100 million is achieved as fast as possible,” he said.
He added that the group’s performance during the first half of the year provided the foundation for the target, and is also pointing to stronger contributions from businesses outside the traditional banking operation.
Mr Nyazema said the group was deliberately seeking to reduce its dependence on the banking unit by accelerating the growth of its insurance, agriculture and investment businesses.
Traditionally, the bank has accounted for the majority of group profits. Mr Nyazema said 93 percent of profits had come from the bank during the comparable period last year, but that contribution had now declined to 86 percent.
The shift, he said, demonstrated early progress in the group’s strategy to build a more balanced financial services business.
Agro-Yield, which has been restructured and recapitalised, contributed about 5 percent of group profits, while the life insurance business contributed 4 percent. Other subsidiaries collectively accounted for another 5 percent.
“We now call them growing subsidiaries. They don’t want to be called small subsidiaries anymore,” Mr Nyazema said.
He said the objective was to have several subsidiaries making meaningful contributions to group earnings by 2028.
“If we have six or seven subsidiaries, all contributing 5 percent as a minimum, it means by the time we get to 2028, the contribution from the bank will be around 65 percent and the other subsidiaries will be at least 10 percent,” he said.
The diversification of earnings is expected to provide CBZ with additional growth avenues while reducing concentration risk within the group.
However, Mr Nyazema stressed that the bank itself would continue to expand and that maintaining its leading market position would require faster growth as competition intensifies.
The bank’s balance sheet expanded during the first half, with total assets increasing by more than US$100 million from about US$1,4 billion to US$1,5 billion.
Deposits also continued to grow, while advances increased from about US$359 million at the end of last year to US$454 million.
Mr Nyazema said the group had the liquidity and funding capacity to support further expansion of lending, with a credible pipeline of funding available to the business.
“Liquidity is there in the market. We have got capacity in terms of funding and we have got a credible pipeline,” he said.
Mr Nyazema said the group had already secured an additional US$150 million in new lines of credit, with drawdowns underway, while negotiations were active for another US$100 million facility.
“The additional funding would take the group’s new lines of credit raised during the year to at least US$250 million. We are not stopping there,” he said.
“When we look at some of our high-profile, high-impact projects, we believe some of the international funders will come directly into those projects.”
Mr Nyazema said CBZ could potentially raise between US$350 million and US$500 million in lines of credit by the end of the year.
“By the end of the year, we would have raised between US$350 million and potentially half a billion in lines of credit,” he said.
Mr Nyazema said significant funding into Zimbabwean projects was being provided directly by global institutions.
He said the group was positioning itself to mobilise both domestic and international capital for projects capable of supporting economic activity. The funding pipeline is also expected to support growth in advances during the second half of the year, after the bank increased advances by about US$100 million in the first six months.
Mr Nyazema said the group expected lending growth to accelerate in the second half, supported by available liquidity, funding capacity and the pipeline of projects.
Mr Nyazema said CBZ Capital had secured mandates to raise substantial amounts of capital, including a US$130 million transaction in the mining sector against an initial mandate of US$75 million. He noted that another US$150 million mining transaction was also expected to close shortly.
“The group’s mandates for future transactions had reached at least US$1 billion, highlighting the potential pipeline beyond the current financial year. For CBZ, the challenge now is to convert the stronger market valuation, growing subsidiaries and funding pipeline into sustained earnings growth,” he said.
Mr Nyazema said the group expected to perform better in the second half of 2026, supported by recovery in some of its businesses and increased lending activity.
He said the group is targeting net profit of more than US$60 million for the current year as it works towards the longer-term US$100 million target. The group also expects continued balance sheet expansion, with deposits projected to reach about US$1,5 billion by year-end from about US$1,1 billion at the end of 2025.
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