First Capital Zim driving Group financials
First Capital Bank Zimbabwe (FCB), a subsidiary of FMB Capital Holdings (FMBCH), has led the group to a further positive performance in the six months to June 30, 2022.
Loan activity for FCB in the first half remained firm with loans and advances to non-banking entities growing 200 percent to $21,40 billion in historical terms with 68 percent of loans being foreign currency denominated.
The bank procured a EUR12,5 m open line of credit from the European Investment Bank (EIB) during the period under review in anticipation of a growing productive sector.
FCB’s non-performing ratio in the period under review remained benign at 1,7 percent with a loan loss ratio of 1,6 percent. In historical terms the bank’s total deposits increased to $40,84 billion, a 149 percent increase from $16,4 billion recorded in June 2021 of which foreign currency deposits accounted for 61 percent.
As has been the trend, non-interest income remained robust contributing $6,58 billion to the aggregate income of $8,60 billion at the end of the period.
While core capital remained above the regulatory target of US$30 million, the rapid devaluation of the local currency exerted pressure on capital resulting in the Bank’s US$ denominated core capital having reduced from US$74,8m as at December 31, 2021 to US$44,4m as at June 30, 2022.
FMBCH announced that in the first half of the 2022 financial year, it had a very strong growth in profit after tax of 93 percent to US$25,2m from the same period last year.
Jaco Viljoen, FMBCH group managing director noted; “Our Group has generated growth driven by our country operations’ strong performance, all of which recorded increased profits over the 6-month period, despite the macro-economic challenges caused by global events. Our financial position is certainly much stronger, and we achieved this by building on the strength of our strategic positioning across the SADC region, where the economic activity has increased post the Covid-19 pandemic.”
The improvement in profitability was attributed to a continuation of the strong momentum from the second half of 2021 and is driven by a combination of expanding corporate banking deal pipelines, as well as improved cost efficiency and scale growth across all five country banking operations, while maintaining credit risk management discipline.
FMBCH recorded growth in its net interest income which was up US$52,1m compared to US$44,2m in the previous period, whilst non-funded Income rose to US$43,7m from US$32,5m in 2021.
Total income grew to US$95,7m from US$76,7 m in June 2021 while operating expenses increased marginally to US$48,5m from US$46,3m. Total Assets increased from US$1,22bn to US$1,29bn, of which total income earning assets remained steady at 67 percent of total assets.
“The interim performance is reflective of our new mission ‘Growth is Our Business’ in which we continue to put our customers’ needs at the heart of our business.
“Our personalised services and products have enabled us to solve for our customers, driving our operating performance growth. In the second half of the year, we will continue working on further enhancements in our digital offerings to cater to our customers’ evolving banking needs,” added Viljoen.
The board of directors resolved to pay an interim dividend of US$3,7m representing 0.15 US cents per share. This is an increase from June 2021, when an interim dividend of US$1,97 million representing 0,08 US cents per share was paid to shareholders.-ebusinessweekly
