First Capital in near double profit growth

First Capital Bank (FCB) reported near double growth in operating profit in the first quarter of this year despite the market being characterised by tight liquidity.

A tight monetary policy regime is poised to persist as authorities look to stem resurgent inflation.
Inflationary pressures continue to pile due to the conflict between Ukraine and Russia, major commodity producers.

The costs relate to transportation and rising food prices while rising cost of fuel have triggered price hikes on basic commodities around the country.

FCB managing director Ciaran McSharry told shareholders that the bank will maintain a cautious outlook.
“We expect a tight liquidity environment to continue as inflationary pressures manifest themselves. We continue to see aggressive liquidity mop up by the Reserve Bank of Zimbabwe together with the high interest rates in an effort to try and contain the growth in inflation.

“The bank will remain cautious in its approach to ensure that liquidity outages are minimised and in addition will be looking to take advantage of the expected resurgence in certain sectors of the economy,” he said.

From a performance perspective, he said the bank’s balance sheet recorded growth in net customer assets of about 16 percent primarily from lending to the productive sectors.

“We have also seen a growth in our liabilities albeit on a more marginal basis alluding back to the tight liquidity situation,” he said.

Overall, Mr McSharry said that assets and liabilities have grown variably.
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“Total income in terms of year on year is up by 38 percent with operating expenses contained to a growth level of 18 percent year on year together with impairment losses significantly down in first quarter meaning that our operating profit is up significantly by 92 percent in the current quarter compared to prior quarter.”

From an inflation perspective, FCB’s net monetary loss stayed largely unchanged with a marginal increase of 5 percent, meaning profit before tax increased to $523 million compared to $116 million last year. Year to date net profit stood at $260 million.

Responding to slow share price movement when compared to other banking counters on the local bourse, he said:

“We have paid a dividend this year and certainly we hope to grow that dividend with the growth in business.

“We make sure that we have minimum capital requirements before we could pay that dividend. Share price is driven by market sentiment and the dividend situation resulted in growth of share price”.

The AGM endorsed $9,05 million and $54,07 million paid as non-executive and executive fees for the past year. Also approved remuneration of $27,14 to Deloitte & Touche for the past audit and their reappointment for the ensuing year.-The Herald