LIVINGSTONE MARUFU
LISTED financial concern, First Capital Bank (FCA) has recorded a 163% profit increase to ZWL$179.2m in the third quarter of 2019 from ZWL$68m recorded in the first half due to growth in transactional and foreign currency trading volumes.
The bank’s third quarter performance comes at a time when the economy is ravaged by inflation, foreign currency shortages, fuel shortages, power outages and depreciation of the local currency against the United States dollar.
During the third quarter trading update ending September 30, FCA company secretary Violet Mutandwa said the bank’s financial performance continued on an upward trajectory from the first half due to an increase in transactional prices and loan growth coupled with increases in minimum lending rate which increased to a minimum of 35% from around 15%.
“In the third quarter, operating profit increased by ZWL$111.2m from ZWL$68m recorded in the first half of the year. Total income increased 159% to ZWL$315.5m from ZWL$121.8m due to fair value adjustments on investment properties,” Mutandwa said.
Operating costs increased by 151% to ZWL$ 116.3m from ZWL$46.4m reported in the first half of 2019 driven by inflation and exchange rate movements.
The bank’s total balance sheet grew to ZWL$2.17bn from ZWL$1.44bn due to growth loans, deposits and exchange impact on foreign currency balances.
Deposits grew by 22% to ZWL$1.26bn whilst loans grew by 38% to ZWL$391m.
Liquidity ratio was 60% whilst capacity adequacy ratio was 32%.
The bank said it is working with the Reserve Bank of Zimbabwe on its legacy debts position and expects this to be resolved by year end.
The bank migrated its core banking system and switch in the first quarter enabling the bank to introduce new products.
During the third quarter the bank witnessed increased demands for local currency loans largely from corporates to fund mainly their working capital requirements.
With the growth in money supply, resultantly the bank’s deposits also increased.
