FCB pumps US$18,7m foreign currency loans
LISTED financial services provider, First Capital Bank, has posted a whopping 1 770 percent growth in foreign currency loans to US$18,7 million in the half-year ended June 30, 2021.
As at December 31, 2020, the financial institution’s foreign currency loans totalled US$1 million.
In a statement accompanying financial results for the six months under review, the bank attributed the exponential trajectory in foreign currency loans to improved deposits.
“Foreign currency loans grew to US$18,7 million in June 2021 from US$1 million in December 2020, driven by the growth in foreign currency deposits,” it said.
During the period under review, First Capital Bank’s total deposits have, in historic terms grown to ZWL$9,8 billion, a 11 percent increase from ZWL$8,8 billion recorded in December last year.
“A loan loss ratio of 0,6 percent demonstrates the quality of our loan book, which has a non-performing loan ratio of 0,14 percent against a market average of 0,3 percent.
“Loans under watchlist constitute 3,3 percent of the loan book,” said the bank.
Operating costs were largely driven by inflation between June 2020 and June this year, with the cost to income ratio showing an improvement from 66 percent to 56 percent, a combination of growth in loans and transactional income.
First Capital Bank is optimistic about the economic environment and looks forward to a second half characterised by further growth in loans and deposits in both local and foreign currency while maintaining a quality loan book.
In the half-year period under review, the institution was on a strong capital position with a capital adequacy position of 24,7 percent compared to regulatory minimum of 12 percent.
“Core capital was US$36 million, exceeding the regulatory target of US$30 million. A capital buffer above the US$30 million will be required to cushion against future exchange rate fluctuations given that the composition of capital is mixed between US$ and ZWL$,” said the bank.
Liquidity ratio was 49 percent compared to regulatory minimum of 30 percent. The bank’s inflation adjusted operating profit (profit before tax excluding investment property and joint venture fair valuation) was ZWL$669 million compared to ZWL$97 million in the prior year.
In historic cost terms, the operating profit was ZWL$935 million compared to ZWL$122 million in prior year. This translates to earnings per share of ZWL$0,7 compared to prior year ZWL$0,9 in inflation adjusted terms while in historic terms it is ZWL$0,33 compared to ZWL$0,35 in prior year.
“The strong performance was underpinned by loan book growth from the second-half of last year to current period coupled with transactional volumes and fee increases.
“Costs continue to be inflation-driven,” said First Capital Bank.
In view of the bank’s capital position and performance for the period under review, the
board has proposed to declare an interim dividend of ZWL$0,5 per share. — chronicle.cl.zw
