LIVINGSTONE MARUFU
First Capital Bank Limited has introduced several United States dollar products to increase its foreign currency generation capacity, a move that gives additional value to shareholders.
Board chairman, Patrick Devenish, said at the listing of the financial services group at the Victoria Falls Stock Exchange (VFEX) last week that the bank was making a first-mover advantage by promoting greater efficiency and deepening its capital markets.
“We plan to increase our foreign earnings. To achieve this we have introduced several foreign currency-denominated products and partnerships through our commercial paper and in the Money Transfer Agents space,” Devenish said.
He added: “We are confident that the VFEX is the right gateway for inbound investment and are positioning ourselves to play a part in bringing in the much-needed dollar investment to the economy.
“With our experience, knowledge, and participation in capital markets, we are ideally placed to be part of the chain that mobilises significant investment capital to the productive sectors.”
Devenish said the group was excited at the prospects of raising United States dollar-denominated funding in the future in the form of fixed capital or debt instruments.
“The move complements the bank’s strategy in that the VFEX is expected to provide better access to international capital, which at some stage should make it possible for the bank to participate in big-ticket investments in the local market and the process result in increased support to the economy at large.
“There are short-term benefits which include, reporting in a stable currency, lower transaction costs, tax incentives for investors, dividends and capital gains that are in United States dollars for investors,” he said.
This comes as First Capital has signed various Memorandum of Understanding (MOU) with the foreign currency-denominated bourse as it capitalised on being the first financial service provider to list.
VFEX chairperson Caroline Sandura said VFEX and First Capital are exploring ways to work together on various initiatives that are aimed at promoting the VFEX and the capital markets.
“Initiatives contained in the MOU seeks to address the following; First Capital providing settlement banking facilities on VFEX with a guarantee fund, partnering the exchange in the establishment of a clearing house, First Capital becoming a Custodial bank, and assisting in the establishment of a foreign exchange trading platform known as contracts for differences trading,” Sandura said.
