BUSINESS REPORTER
Financial services group First Capital Bank (FCB)’s total income increased to ZWL$26bn in the quarter to September 30, 2022 from ZWL$16.4bn achieved in the previous quarter due to a surge in interest income.
Acting company secretary, Sarudzai Binha, said the growth in interest income was propelled by an increase in foreign currency loan book and the “repricing of the ZWL$ book in line with the extant interest rate policy framework”.
She said the foreign currency denominated earnings increased by 18 percentage points to 40% in Q3 from 22% achieved in Q1.
Operating expenses increased 43% to ZWL$13.9bn in Q3 from ZWL$9.7bn achieved in the comparative period indicating cost expansion in response to the inflationary pressure.
Total assets for the group grew by 41% between December 2021 and September 2022 driven by customers’ loans and deposits growth of 59% and 30% respectively.
Credit quality remained strong with a non-performing loan ratio of 0.1% in Q3 down from 1% recorded at the end of 2021.
Total equity increased by 24% with the bank’s capital position remaining strong with a satisfactory margin of safety above the US$30m threshold and capital adequacy ratios well above the regulatory minimums.
Binha said inflationary pressure on the global stage has remained high on the back of the continuing war between Russia and Ukraine which has impacted on food security and access to energy amongst other supply chain disruptions worldwide.
The local economy has been impacted by the effects of long-term instability in the monetary system, recording average month-on-month inflation for the quarter at 13.8%, increasing from an average of 3.8% during the same quarter of 2021.
Binha said the lender will remain cautious in its approach to asset creation, ensuring that a sufficient liquidity buffer is maintained to avert outages whilst borrower capacity is assessed rigorously, taking advantage of the apparent resurgence in key sectors of the economy.
