First Capital Bank seeks additional offshore credit lines
LIVINGSTONE MARUFU
First Capital Bank, a publicly traded provider of financial services, is looking for more offshore credit lines to protect itself from economic downturns and support the expansion of the productive sector.
As part of its plan to survive the inflationary environment, the lender obtained more than US$90m in credit lines from the European Investment Bank and Afreximbank last year. Now, the financial institution is looking for additional credit lines.
Financing the productive sectors of the economy continues to be a major area of focus for First Capital Bank, according to CFO Fanuel Kapanje (pictured).
“Our strategic partnerships and mutually beneficial relationships with other global financial institutions have secured a steady stream of foreign lines of credit that have nurtured the growth of our client’s business in the current environment. We will continue to structure similar transactions to create a solid reservoir for drawdowns and leverage on opportunities that will contribute to key developmental projects that are key to the economy,” Kapanje said.
The bank reported an adjusted profit of US$9.05m, which was supported by income growth of US$32.1m over the six months to June 30 2023. This growth was fuelled by an improvement in the underlying business, specifically an increase in customer base, growth in loan book, and exchange gains.
Ciaran McSharry, managing director of First Capital, stated: “Our clients and customers are central to everything we do. They inspire us, and we are inspired by our capacity to offer top-notch banking solutions that will support sustainable economic growth. Our well-designed framework for service delivery is intended to offer solutions that are both market-relevant and distinctively convenient, efficient, and more secure.
To control their overall cost base, First Capital continues to actively pursue cost-optimization strategies.
During the period under review net interest income and net fees and commissions increased by 35% and 23% respectively.
Operating expenses increased by 22% from US$16.6m in the first half of 2022 to US$20.3m in the period under review.
This resulted in the cost to income ratio moving from 58% in June 2022 to 63% in June 2023.
The adjusted total comprehensive income for the period, amounted to US$8.2m for the six months to June 2023, 43% lower than the US$14.4m total comprehensive income reported for the corresponding period in 2022.
The bank’s capital adequacy ratio remained strong, closing the period at 37% well above the regulatory minimum of 12%. With a liquid assets ratio of 49%, the bank carried a comfortable buffer above the regulatory minimum of 30% representing capacity to underwrite more business.
Shareholder returns were attained seeing them declare an interim dividend of US$0.14cents per share.
First Capital Bank was the first bank to list on the Victoria Falls Stock Exchange in May this year.
This was part of the bank’s efforts to unlock value for shareholders whilst providing great opportunities for investors.
