First Capital Bank US dollar loans surge
FIRST Capital Bank (FCB), formerly Barclays Bank, says foreign currency denominated loans grew by 1 770 to US$18,7 million in the interim to June 30, 2021, compared to the same period last year, driven by improved economic activity.
Ciaran McSharry, the bank’s managing director, said 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.
“We are optimistic about the economic environment and look forward to a second half characterised by further growth in loans and deposits in both local and foreign currency whilst maintaining a quality loan book,” he said.
McSharry added that the local currency deposits were deployed into loans, which grew by 279 percent to $2,3billion, a 63 percent loan to deposit ratio.
According to McSharry, the loan loss ratio stood at 0.6 percent during the half year with a non-performing loan ratio of 0.14 percent against a market average of 0,3 percent.
“Customers in the tourism and other services sectors significantly affected by Covid-19 are on the watchlist and constitute five percent of the loan book,” he said.
The Bank also credited the performance to good stock market capitalisation as well as a stable economic environment which slowed inflation.
McSharry said the Banks’core capital was US$26 million at year end compared to a regulatory target of US$30 m required by December 1, 2021.
“Given the mix in the capital base between local and foreign currency denominated assets, the tracking towards the US$30 million target will be impacted by the volatility in the exchange rates, and will demand that we build a capital buffer to protect against devaluation,” he said.
He, however, noted that the Bank is on track and confident in meeting the target. Cost to income ratio improved from 95 percent to 50 percent on the back of growth in income.
Funded income grew by 695 percent driven by increase in loans and advances together with an improved loan yield.
McSharry said that improved economic confidence in the second half of 2020 saw transactional activity grow, which coupled with targeted price increases saw increased fee and commission income.
Liquidity ratio for the period was 49 percent compared to a regulatory minimum of 30 percent.
During the period under review, the bank accelerated its digital platform development and enhancements to increase the Bank’s digital capabilities.
“Our expanding digital product suite continues on a growth trajectory that has led us to launching services that allow customers to transact from anywhere at any time.
‘‘During the period under review, we introduced a multi-transactional WhatsApp Banking platform, Reverse Billing on internet banking, Zipit Smart Acquiring and Infinipay, a payment platform for our Commercial customers,” McSharry said.
He added that the bank will continue on its digital transformation journey and enhance existing platforms to give a superior experience and increased transactional security.
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