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Nelson Gahadza-Senior Business Reporter
First Capital Bank (FCB) has mobilised an additional US$15 million credit facility from the African Development Bank, bringing the total available facilities from various regional and international funders to US$48,5 million.
The bank, in a trading update to March 31, 2024, said the increased facilities would boost its capacity to support the expected economic rebound.
“These will significantly enhance the bank’s capacity to support growth in key sectors of the economy and facilitate the anticipated economic rebound,” said Sarudzai Binha, the company secretary.
Currently, several banks in Zimbabwe are riding on the facilities from AfDB to support local companies, which are export-oriented, and sectors of the economy, mainly agriculture.
Zimbabwe’s real gross domestic product (GDP) growth is projected to slow down to 3,3 percent in 2024, partly reflecting the impact of the El Nino-related drought and lower commodity prices.
For the quarter under review, the bank’s total income, before once-off fair value adjustments, grew by 40 percent to close at US$20,5 million from US$14,6 million for the same period in 2023, driven by strong performance in both net interest income and non-funded income.
“The bank’s accelerated lines of credit and interest income was bolstered by a 15 percent increase in the loan book to US$91 million as of March 31, 2024, from US$79 million recorded as of March 31, 2023,” said Ms Binha.
Reflecting general market apprehension, Ms Binha said total deposits increased marginally to US$132 million during the period under review.
She said funding was thus augmented by recourse to lines of credit whose drawdowns increased from US$2,9 million to US$16,5 million between March 2023 and March 2024.
Ms Binha noted that cost pressures remained elevated, with operating expenses rising by 12 percent to US$10,4 million in the first quarter of 2024 compared to the same period in 2023.
She highlighted that a rigorous rationalisation and optimisation exercise is currently underway to curtail cost expansion.
According to the trading update, the bank’s non-performing loan ratio (NPL) continued to improve quarter-on-quarter, closing at 7 percent as of March 31, 2024, from 8 percent in December 2023 and 13 percent as of June 2023, following various interventions undertaken and underway, such as sectoral redistribution, to improve overall asset quality.
“The bank’s capital increased by 25 percent during the quarter, with the capital adequacy ratio (CAR) at 35 percent, well above the regulatory threshold of 12 percent.
“At US$58,2 million, core capital remained comfortably above the regulatory absolute threshold of US$30 million, and liquidity ratios remained above the minimum regulatory requirement of 30 percent throughout the period under reporting,” said Ms Binha.
She highlighted that the bank remains positive about growth prospects in the medium term by diligently harnessing the opportunities while exercising robust risk and cost management.
Online Reporter