FBC declares $1,2bn full year dividend

FINANCIAL Services Group, FBC Holdings Limited, has proposed a final dividend of 148,82 cents per share amounting to $1,2 billion to its shareholders for the full year period ended 31 December 2021.

This is over and above the interim dividend of 29,76 cents per share paid in October last year. This comes as group’s chairman, Mr Herbert Nkala, has said that despite anticipated headwinds, they expect a solid business momentum to continue this year, which will result in increased growth.

“The total dividend declared for the year 2021 amounts to $1,2 billion, which includes the interim dividend of $200 million,” said Mr Nkala in a statement accompanying the group’s financial results for the period under review.

“The proposed dividend translates to 5,71 time’s cover, which is 17 percent of the historical cost profit after tax.”

Despite the economic challenges experienced in 2021, Mr Nkala said the group achieved “a solid financial performance”, which saw it posting a profit before tax of $5 billion in inflation adjusted terms, 93 percent ahead of $2,6 billion recorded in 2020.

The financial house said its total income was up 37 percent to $17,9 billion, which it attributed to improved revenue growth across all income streams with the exception of net foreign currency dealing and trading income, which experienced a decline.

Mr Nkala said through a cocktail of cost containment measures implemented, the group’s cost to income excluding monetary loss improved to 58 percent from 64 percent recorded in the comparable period.

“Given the inflationary pressures experienced throughout 2021, total income administration costs increased by 24 percent to $9 billion compared to $7,2 billion recorded in the prior year.

“Similarly, insurance claims were up to 21 percent owing to the inflation adjusted components of various claims.

Insurance commission expense significantly went down by 38 percent, signifying a decrease in insurance business from broker.

“Due to revised retention limits, insurance claims and loss adjustment expenses recovered from re-insurers was down 43 percent to $96 million against $169 million recorded in 2020,” said Mr Nkala.

As at December 2021, the group’s assets were valued at $63,3 billion, 22 percent ahead of $52,1 billion recorded during the prior year comparable period.

The growth, Mr Nkala said, was largely driven by an increase in total deposits of $37 billion, translation of foreign currency denominated assets in Zim-dollar terms at closing rate, property investments and increased retained earnings.

“Loans and advances stood at $23,5 billion, 10 percent higher than $21,4 billion for prior year, as we continued to focus on supporting our customers in the productive sectors of the economy through lending,” he said.

Going forward, Mr Nkala said although the ongoing Covid-19 pandemic is still a threat, the group is hopeful that Government’s sound policies will steer the economy. “The local economy still faces a number of hurdles despite strong positive economic trends witnessed in 2021.

Concerted efforts have been and will continue to be made in the fight against the Covid19 pandemic and this is expected to result in the world economy,” said Mr Nkala.

“Country specific economic challenges such as inflation and currency woes may further drag the economy. It is however, expected that Government response in the form of fiscal and monetary policies, will steer the economy turbulences, thus presenting new opportunities for the Group.”-The Chronicle