daniel chigunwe
Tapiwanashe Mangwiro
Senior Business Reporter
FBC Holdings (FBC) before-tax profit for the full year to December 2023 jumped 255 percent to $403,5 billion, in a demonstration of resilience amidst challenging conditions.
Group chairman, Herbert Nkala, emphasised the significance of the performance in light of the broader economic environment and the group’s strategic priorities.
The growth underscores FBC’s ability to navigate turbulent economic times and capitalise on strategic opportunities.
FBC said the strong performance was primarily attributable to robust growth in total income, which soared by 138 percent to $1,3 trillion.
This surge was driven by growth across revenue streams except for insurance and property sales, reflecting the group’s diversified business model and resilience across multiple sectors.
Net interest income increased by 69 percent to $239,8 billion, after a 121 percent growth in loans and advances, predominantly denominated in US dollars.
The growth was indicative of heightened demand for foreign-currency-denominated loans in response to increased usage of multiple currencies for local transactions.
Net fee and commission income registered a 179 percent growth to $231,5 billion, underpinned by increased transactional volumes across digital delivery channels.
These figures underscore the group’s strategic focus on leveraging technology and innovation to drive revenue growth and enhance customer experience.
“GDP is projected to be around 3,5 percent in 2024, which is a decrease from 5,3 percent in 2023. This partly reflects the impact of the El Nino drought on agricultural production and lower commodity prices,” Mr Nkala stated, underscoring the contextual backdrop against which FBC performance must be assessed.
“The group will continue to scout for opportunities to create value for all key stakeholders while emphasising the preservation of capital.”
Despite the challenges, FBC reported a strong set of results, with profit before tax, adjusted for inflation, surging by an impressive 255 percent to $403,5 billion compared to the previous year.
However, FBC said challenges persisted within the insurance sector, with group subsidiaries reporting an insurance service loss of $12,4 billion.
This was attributed to a persistent mismatch between premium recording, collections, and foreign currency-indexed claims, highlighting the need for continued focus on risk management and operational efficiency.
Despite the challenges, the group strengthened its financial position, with its statement of financial position reaching $3,4 trillion, anchored by a significant increase in loans and advances.
Shareholders’ funds also experienced substantial growth, rising by 141 percent to $706 billion, reflecting the Group’s commitment to delivering sustainable value for its shareholders.
“In the broader financial services industry, market stability prevailed throughout the year, albeit with tightening liquidity as elections approached. Nonetheless, the sector invested in hedging strategies, resulting in increased revaluation and foreign exchange gains,” Mr Nkala added.
The banking sector witnessed significant growth in aggregate loans while maintaining favourable asset quality well below regulatory thresholds.
Mr Nkala said “Regulatory developments also shaped the landscape, with the introduction of the National Financial Inclusion Strategy (NFIS) II and the Insurance (Amendment) Regulations, 2023.
“These initiatives aimed to promote inclusivity and manage high-premium debtors while enhancing regulatory compliance within the insurance sector.”
Regarding the property market, FBC observed resilience in certain sectors despite prevailing economic challenges. The stabilisation of the multi-currency regime towards the end of the year contributed to a slight growth in residential construction, although sales remained subdued due to foreign currency payment requirements.
Despite market shifts towards suburban office spaces, FBC Holdings remained committed to supporting national housing initiatives. The Group contributed to community development by providing rental units and constructing townhouses, underscoring its dedication to societal advancement.
Looking ahead, Mr Nkala reaffirmed FBC Holdings’ commitment to preserving shareholder value and fostering sustainable growth amidst evolving market dynamics.
As the economic landscape continues to evolve, FBC Holdings remains poised to adapt and thrive in the face of challenges, driven by its strong financial performance and strategic foresight.
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