Zimbabwe’s largest financial services firm by assets, CBZ Holdings, has divsrsified to such an extent that it may no longer be classified as a commercial bank, analysts have suggested.

Market watchers have pointed to the fact that most of the company’s income is now coming from non-core operations.

“Despite outperforming peers on growth in loan book, CBZ is increasingly earning a significant chunk of its income from sources that we think are non-recurring and not core to operations.

“For example, 43% of the bank revenue had to do with FX (foreign currency) related transactions,” said Emergent Securities analysts Ray Chipendo and Emmanuel Sibanda in a research note.

The group has various operating units, such as CBZ Bank Limited, which provides commercial banking and mortgage finance products; CBZ Asset Management (Private) Limited, which provides fund management services to investors through placement of either pooled portfolios or individual portfolios, and CBZ Insurance (Private) Limited, which provides short term insurance. Its other operating units include CBZ Properties (Private) Limited, which acts as the property investment arm of the business; CBZ Life (Private) Limited, which provides long term life insurance.

The analysts have also raised concerns over the bank’s apparent dependence on ‘state business’.

“CBZ Holdings has morphed into a multi-segment company with multiple intersegment connections. The group does business with the State and the Reserve Bank of Zimbabwe (RBZ) more than any other institution in Zimbabwe.

“CBZ has significant transactions and projects that involve the state and the RBZ. Most of these have to do with outstanding foreign currency payments.

“FY2019 financials point to receivables priced at ZW$7.6 billion. The asset are RBZ’s legacy liabilities to be exchanged at 1:1. The queue of companies with similar arrangements with RBZ is quite long and the obligations are still largely unsettled.”