€12,5m First Capital Bank package to bridge capital funding needs

FIRST Capital Bank (FCB) says it will deploy the €12,5 million line of credit it secured from the European Investment Bank (EIB) to bridge capital funding needs in the market, which will help prop up economic activity.

The facility secured from the EIB is a medium-term facility running up to seven years and is expected to provide capital funding for eligible investment projects undertaken by small to medium enterprises (SMEs) and mid-cap companies under First Capital Bank Limited.

European Investment Bank

The credit line is part of the Zimbabwe Private Sector Facility from the Impact Finance Envelope of the Investment Facility (IF) that is extended by the European Investment Bank to a group of financial institutions located in Zimbabwe.

In a statement accompanying financial results for the half-year ended June 30, 2022, the bank said “This is a critical intervention coming at a time when the economy is showing signs of a rebound”.

The financial institution said it was committed to providing its customers with relevant products and services that support their individual needs.

This is being achieved on the back of strong relationships with like-minded technical and business partners, it said.

Recent partnerships with money transfer agencies — RIA and HelloPaisa — were followed by the successful launch of Western Union resulting in increased options for customers. The bank has also launched a series of innovative enhancements on its mobile app, creating a 360-degree banking experience with multiple functionalities.

“Additionally, a gold card with improved security features for those who travel or make payments online was successfully launched during the period.

“The bank will continue to build a presence in the innovation space and capitalise on opportunities,” it said.

On the outlook, FCB said the board expects the operating environment to remain tight in the short to medium term.

“Consequently, a fine balance will be maintained between the quest for short term profitability and the long-term sustainability of the business,” it said.

“The board remains optimistic about the growth prospects of the business notwithstanding the requirement for caution in navigating expected short-term disruptions that may still emerge at a macro-level as policies adopted by regulatory authorities to stabilise the markets take root.”

Meanwhile, the bank’s total deposits adjusted for inflation grew by 14 percent from $35,9 billion as at 31 December 2021 to $40,8 billion as at 30 June 2022.

Its loan book also increased by 37 percent over the same period to close at $21,4 billion compared to $15,6 billion at 31 December 2021, with 68 percent of business having been underwritten in foreign currency.

“Asset quality remained satisfactory with a loan loss ratio of 1,6 percent during the period against a non-performing loan ratio of 1,7 percent, well within the bank’s appetite,” said the bank.

“Total income over the six months to 30 June 2022, at $10,4 billion, increased by 57 percent over the total income earned in the corresponding period in 2021, which amounts to $6,6 billion.

“This was supported by an improvement from underlying business, with net interest income and net fees and commissions having increased by 12 percent and 18 percent respectively.”

The bank said a 290 percent increase in foreign exchange trading income also contributed significantly to income growth, underlining the effects of exchange rate movements and growth in foreign currency denominated business during the period.

The bank posted a profit of $471,9 million for the six months to June 2022, a slight reduction of two percent from $483,8 million recorded for the same period in 2021.-chronicle.c.zw