First Capital PAT spikes 342%
BUSINESS REPORTER
First Capital Bank (FCB)’s profit after tax spiked 342% to ZWL$3.354bn for the full year ended December 31 2021 from ZWL$759m recorded during the comparable period due to the positive outturn in the total income.
In a statement accompanying the bank’s financial results, First Capital Bank chairman Patrick Devenish said the bank recorded an increase in total income in real terms at 39%, to close the year at ZWL$7.5bn against ZWL$5.4bn in 2020.
“The bank’s performance remained solid despite the persistence of macro-economic fragility, with an increase in inflation-adjusted profit of 342% having been realised during the period under review,” Devenish said.
Managing director First Capital managing director Ciaran McSharry said: “This was underpinned by a positive outturn in core business revenues, representing a strong quality of earnings and improved sustainability of operations.”
The bank’s net interest income increased by 96% on the back of a 235% growth in interest earning assets.
Net commissions and fees increased by 33% representing the effect of increased customer transactions and moderate fee adjustments.
“With some modicum of exchange rate stability having been exhibited for the greater part of the year on the back of the foreign exchange auction system, net trading and foreign exchange income receded by 52% during the year under review,” McSharry said.
He said fair value gains on investment property recognised during the year at ZWL$0,8bn constituted 11% of total income compared to a loss of ZWL$0.05bn in 2020.
Loan impairment charges reduced by 57% reflecting the quality of our loan book. However, this is against a non-performing loans ratio of 1% on 31 December 2021 compared to 0.16% at the end of 2020.
Operating expenses increased by 35% in real terms with a cost to income ratio of 58% being achieved against 60% in the prior year.
The bank’s share of operations from a joint venture entity which owns a property in the hospitality sector amounted to ZWL$1.5bn, turning around from a loss of ZWL$0.2bn in 2020, driven by the revaluation of underlying assets.
Net gains through other comprehensive income amounted to ZWL$1.9bn in 2021 compared to a loss of ZWL$0,2bn in 2020, representing the valuation uplift on properties and other assets.
Total assets grew by 30,5% to ZWL$30.3bn as at December 31 2021 from ZWL$23.2bn as at December 31 2020, driven by the joint impact of real growth on core business assets and revaluation adjustments on fixed properties and investments.
Loans and advances increased by 88% from ZWL$3.8bn as at December 31 2020 to ZWL$7.1bn as at December 31 2021.
The growth in interest earning assets was supported by a 15.7% real growth in deposits from ZWL$14.2bn as at 31 December 2020 to ZWL$16.4bn as at December 31 2021.
The loans to deposit ratio closed at 44% while liquidity ratios were maintained above 45% throughout the year, exhibiting prudent balance sheet management in an otherwise challenging operating environment.
