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Business Reporter
Victoria Falls Stock Exchange (VFEX) listed First Capital Bank (FCB) reported a 26 percent increase in profit after tax for the year ending December 31, 2023, reaching US$15,4 million compared to US$12,2 million in the previous year.
This growth was supported by a 33 percent rise in total income to US$71,2 million from US$53,4 million in 2022.
The bank’s performance benefited from an increase in customer base, loans, and a rise in US dollar transactions. FCB also achieved exchange gains through active currency management.
Adjusted earnings per share of US71 cents for the period was achieved representing a 26 percent growth above the US57 cents per share recorded in the prior year.
“This growth was driven by an improvement in the underlying business, driven by growth of the customer base, increase in loans and advances, and an increasing proportion of US dollar transactions.
“Active management of the currency positions also resulted in exchange gains,” said FCB.
However, the year also presented challenges.
The first half saw significant exchange rate volatility with a 735 percent depreciation of the Zimbabwean dollar by June 2023. While the rate stabilised in the second half due to tighter monetary policies, overall liquidity remained constrained throughout the year. This impacted FCB’s deposits.
“Some of the implemented measures included the introduction of gold coins and gold-backed digital tokens, in addition to the more aggressive application of non-negotiable certificates of deposits on daily excess funds bringing relative exchange rate and price stability.
“Overall, liquidity supply during the second half remained challenging across all currencies, constraining asset expansion in the financial sector,” said the group.
Total deposits dropped 9 percent to US$123,2 million compared to US$136,1 million in 2022.
The decline is attributed to the devaluation of Zimbabwe dollar deposits, which constituted only 13 percent of total deposits compared to 22 percent in 2022. Conversely, US dollar deposits increased by 6 percent.
Despite these challenges, loans to customers grew by 30 percent to US$86,1 million, with 92 percent of business conducted in US dollars. While operating expenses also rose by 55 percent, the bank is actively pursuing cost optimisation strategies.
Operating expenses increased by 55 percent from US$30 million in 2022 to US$46,7 million in the year under review, which resulted in the cost-to-income ratio moving from 56 percent in 2022 to 66 percent in 2023.
FCB remains committed to delivering improved customer service and generating value for all stakeholders.
“The bank continues to actively pursue cost optimisation strategies to manage the overall cost base,” said the group.
Online Reporter