FCA posts solid results
First Capital Bank says it posted a strong performance in the year to December 2020 despite significant headwinds caused by Covid-19 and the volatile macro-economic environment.
The Bank’s total deposits grew by 331 percent driven by a 298 percent growth in local currency deposits to $4 billion, while foreign currency deposits grew by $3,7 billion.
These local currency deposits were deployed into loans, which grew by 279 percent to $2,3 billion, resulting in a 63 percent loan to deposit ratio.
Non-performing loans ratio stood at 0,16 percent lower than prior year 0,22 percent and market average of 0,3 percent. The tourism and other services sectors significantly affected by Covid-19 are however, on the watch-list and constitute 5 percent of the loan book.
Funded income grew by 695 percent, driven by increase in loans and advances together with an improved loans yield. Operating profit excluding property gains was $606 million in inflation adjusted terms whilst in historical terms, it was $785 million.
This translates to inflation-adjusted earnings per share of $21,89 and $80,55 in historical cost.
In a statement accompanying the 2020 full year financial results released Wednesday, chairman Mr Patrick Devenish, said improved economic confidence in the second half of 2020 saw transactional activity grow, which coupled with targeted price increases (due to inflationary pressure) saw increased fee and commission income.
Mr Devenish said the strong performance is a testament to the agility and resilience of the Bank’s strategy.
As a result, the Bank closed the year on a strong capital and liquidity base, with total capital adequacy ratio of 29 percent against the regulatory minimum of 12 percent. The liquidity ratio was 70 percent against the regulatory minimum of 30 percent. “This strong base gives the business capacity to issue more loans in the future,” Mr
Devenish said.
First Capital Bank is closer to the regulatory capital adequacy with core capital at US$26 million at year end compared to a regulatory target of US$30 million required by December 31, 2021.
Mr Devenish said although the Bank is confident in meeting the core capital target, tracking towards the US$30 million target will be impacted by the volatility in the exchange rates.
This will demand that we build a capital buffer to protect against devaluation, Mr Devenish said.-herld.cl.zw
