FirstCapital splurges ZWL$384m into agric

LIVINGSTONE MARUFU

Listed financial services  provider, First Capital Bank, has invested ZWL$384m into agriculture activities as part of efforts to help the sector improve production and productivity.

The lender’s  loan book  grew by 42% to ZWL$3.2bn in the first quarter of 2021 with agriculture leading the  bank’s sectoral lending.

First Capital Bank corporate affairs associate Tsitsi Munyaradzi told Business Times that agriculture was the mainstay of the country’s economy and should be funded to earn foreign currency and reduce imports.

“We consistently support the agricultural sector and have invested about 12% of our total loan book to its activities ..,” Munyaradzi said. 

The lender, however, reported a loss  of ZWL$52m in the first quarter (Q1) of 2021 due to low transactional activity in the market.

In a  Q1 trading update, company secretary, Violet Mutandwa, said transactional volumes were down by more than half in the first month of the quarter due to the Covid-19 lockdown but gradually increased to normalised levels in March as the lockdown eased.

Interest rates declined at the beginning of the first quarter due to surplus RTGS liquidity, she said.

Mutandwa said liquidity tightened towards the end of the quarter due to tightening monetary policy, although there was  surplus liquidity  in the market at the beginning of the year.

Total income for First Capital Bank in Q1 stood at ZWL$931m in inflation-adjusted terms, while the operating expenses were ZWL$663m.

The operating profit before monetary loss and property fair value adjustment was ZWL$183m.

Balance sheet growth has been driven by ZWL$ loans which grew by 42% to ZWL$3.2bn.

Foreign currency loans grew by 660% to US$6.7m whilst deposits increased by 14% to US$56.7m.

The bank expects that the US$30m capital requirement will be achieved by June 30 2021, if the current level of performance together with exchange rate stability is sustained.

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