BUSINESS REPORTER
First Capital Bank balance sheet rose by more than half to ZWL$161bn as at December 31 2022 from ZWL$104bn in the comparative period the previous year due to a growth in deposits.
“The total balance sheet increased by 55% to close at ZW$160.8bn on December 31 2022 from ZW$104.0bn on December 31, 2021. This was largely driven by a 66% growth in deposits which moved from ZW$56.4bn in 2021 to ZW$93.5bn at the end of 2022,” First Capital Bank MD Ciaran McSharry told an analysts briefing on Monday.
Loans to customers increased by 85%, from ZW$24.6bn at the end of 2021 to ZW$45.3bn on 31 December 2022 reflective of an increase in credit appetite which, for many borrowers, was constrained by reduced absorption capacity when interest rates were reviewed upwards, McSharry said.
The loans to deposit ratio increased to 48% in the period under review from 44% in the previous year.
The funding of the balance sheet generally remained transient, resulting in a significant level of resources, 33% in 2022 and 30% in 2021, being carried in the form of cash and bank balances to meet customer transactions.
The overall liquidity ratio was always maintained above 50%, well above the regulatory threshold of 30%.
The group’s equity increased by 30% while the bank’s closing capital adequacy ratio was 34%, representing substantial headroom to underwrite new business.
First Capital Bank posted a 42% increase in total income, growing to ZWL$36.7bn in 2022 from ZWL$25.9bn in 2021.
This was on the back of broad-based performance improvement across all revenue lines and net interest income increased by 37% following a 77% increase in interest-earning assets.
McSharry said its contribution to total income however reduced to 34% from 36% in the prior year.
A 25% year-on-year increase in fees and commissions was posted, reflecting the impact of increased platform usage by clients and a 48% increase in the customer base.
Fees and commissions contributed 33% to total income, a reduction from 38% recorded in 2021. Trading and foreign exchange income increased by 267%, contributing 31% to total income, up from 12% in 2021.
This largely reflects the implications of the devaluation of the local currency at a level not fully captured in the inflation index.
A fair value loss on investment property was posted at ZWL$0.4bn, compared to a profit of ZWL$2.8bn in 2021.
A profit after tax of ZWL$8.4bn was posted, being a 27% reduction from ZWL$11.5bn achieved in 2021.
