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IZWE LOANS RECORDS 18P.C. REVENUE DECLINE

By BUUMBA CHIMBULU

A decline of 18 percent in gross revenue has been reported by Izwe Loans Zambia Plc (IZWE) following the adoption of a strategy by management to preserve liquidity and reduce growth levels amidst adverse macroeconomic condition.

Company gross revenue declined to K354.7 million in 2020 when compared to K432.32 million recorded in 2019.

This is according to the company’s abridged financial statement for the financial year ended December 31,2020 posted on Lusaka Securities Exchange (LuSE).

The results indicated that the reduction in revenue was primarily attributed to the strategy adopted by management to preserve liquidity and reduce growth levels amidst adverse macroeconomic condition.

As a result, Earnings Per Share (EPS) decreased year-on-year from K0.93 to K0.47.

Giving the financial highlights, IZWE chief Executive Officer, Kulusu Chisola, said the firm reported an after tax profit of K48.8 million in 2020 from K96.8 million the prior year, representing a 48.5 per cent year-on-year reduction.

Mr Chisola said the operating expenses increased by 32.4 per cent from prior year expenditure of K93.1 million to K123.4 million in 2020.

“The strategic changes introduced in the year resulted in a long- term sustainable cost base restructuring with the impact likely to be seen only in the coming trading years,” he said.

Mr Chisola said the net loans and advances declined by 25 per cent from K810.2 million in 2019 to K611.5 million in 2020.

This reduction was attributed to the strategic decision to preserve book quality by tightening credit policies, introducing more conservative credit evaluations and placing additional focus on collections initiatives.

”Borrowings and corporate notes reduced to K449.0 million from K 655.0 in 2019 as some contractual facility repayments were concluded,” he said.

Mr Chisola said they remained strongly capitalised with healthy equity of K260.6 million in 2020 from K311.8 million the previous year, enabling it to comfortably meet all obligations; return the business to a growth trajectory; and continue to exceed the Bank of Zambia minimum capital requirements.

He noted that the Central Bank provided the Medium-Term Refinancing Facility to the financial sector with the intention to increase credit extension to sectors of the economy effected by the pandemic.

Mr Chisola said IZWE successfully accessed the facility which assisted in providing much-needed liquidity and ensured continued support to its clients. “The Government initiatives provided to the financial sector in the second half of 2020 provided the much-needed liquidity relief, and gave IZWE a strong base in the second half of 2020, despite the negative effects of the Covid-19 on the sector,” he said.

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