First Capital operating income up 60 percent
LIVINGSTONE MARUFU
First Capital Bank operating income grew by 60% to ZWL$3.7bn in the third quarter ended September 30 from ZWL$2.3bn in the previous quarter due to increase in loans and transactional income despite some headwinds caused by the Covid-19 pandemic.
In a statement accompanying third quarter trading ended September 30 2021 First Capital acting company secretary Sarudzai Binha said the business witnessed increased demand for both local and foreign currency loans due to increased economic activity after the lockdown measures had been eased.
“The bank’s year to date inflation adjusted operating income increased by ZWL$1.4bn from the second quarter to ZWL$3.7bn in the third quarter whilst in historical terms, the increase was ZWL$1.4bn to ZWL$3.6bn,” Binha said.
Inflation adjusted year to date operating expenses increased to ZWL$2.6bn during the third quarter from ZWL$1.6bn due to the expenses brought about by Covid-19, inflation and administrative costs.
Binha said the third quarter of the year had some headwinds due to Covid-19 which impacted business operating hours hence transactional levels were lower.
Year to date operating profit excluding investment property gains and tax increased by ZWL$814m to ZWL$1.5bn in inflation adjusted terms.
Inflation adjusted profit after tax was ZWL$393m.
Customer deposits grew by ZWL$2.8bn to ZWL$12.6bn driven by growth from both local and foreign currency depositors with foreign currency deposits constituting 46% of the total deposits.
Loans grew by ZWL$ I.3bn to ZWL$6.1bn.
The loan book continues to perform well with non-performing loans at 0.19% of the loan book due to strict lending rules which do not allow farmers to borrow, Binha said.
She said the interbank exchange rate has recently seen some depreciation of the local currency after a period of relative stability pushing up the cost of doing business.
In addition, there has been notable depreciation of the local currency on the informal market which may result in increased costs in the short-medium term, Binha said.
