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Senior Business Reporter
FIRST Capital Bank Limited posted a 42 percent increase in total income, growing from ZW$25,9 billion in 2021 to ZW$36,7 billion in 2022 while loans to customers increased by 85 percent from ZW$24,6bn at the end of 2021 to ZW$45,3bn on December 31, 2022.
In its audited results for the year ended December 31, Victoria Falls Stock Exchange (VFEX) bound financial institution said the spike in loans is reflective of an increase in credit appetite which, for many borrowers, was constrained by reduced absorption capacity when interest rates were reviewed upwards.
“The loans to deposit ratio increased marginally from 44 percent on December 31 2021 to 48 percent as of December 31 2022,” reads part of the audited results.
In his 2023 Monetary Policy Statement in February, The Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya reduced the bank policy rate to 150 percent from 200 percent per annum in a development largely expected to ease borrowing costs to individuals and small businesses keen to access cheaper lines of credit or personal loans.
The group posted a 42 percent increase in total income, growing from ZW$25,9 billion in 2021 to ZW$36,7 billion in 2022 on the back of broad-based performance improvement across all revenue lines.
Net interest income increased by 37 percent following a 77 percent increase in interest earning assets.
Its contribution to total income however, reduced to 34 percent from 36 percent in the prior year.
A profit after tax of ZW$8,4bn was posted, being a 27 percent reduction from ZW$11,5bn achieved in 2021.
However, it noted that operating profit excluding the impact of property valuations increased by 57 percent
The bank said the total balance sheet increased by 55 percent from ZW$104,0bn on December 31 2021 to close at ZW$ 160,8bn on December 31 2022.
This was largely driven by a 66 percent growth in deposits which moved from ZW$56,4bn in 2021 to ZW$93,5bn at the end of 2022.
It said the funding of the balance sheet generally remained transient in nature, resulting in a significant level of resources, 33 percent in 2022 and 30 percent in 2021, being carried in the form of cash and bank balances to meet customer transactions.
The overall liquidity ratio was always maintained above 50 percent, well above the regulatory threshold of 30 percent.
During the year under review, the financial institution expanded its money transfer partner network improving general convenience for its customers.
Lines of credit were negotiated with the European Investment Bank (EUR12,5m) and Afreximbank (US$20m) and are at varying stages of disbursement.
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