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Nelson Gahadza
First Capital Bank says loans to customers for the interim period to June 30, 2022 increased by 37 percent to $21,4 billion from $15,6 billion as at December 31, 2021, with 68 percent of the business having been underwritten in foreign currency.
Ciaran McSharry, the bank’s managing director in a trading update said that on the same basis, total deposits adjusted for inflation grew by 14 percent from $35,9 billion as at December 31, 2021 to $40.8 billion as at June 30, 2022.
He said that during the period under review, the Bank’s asset quality remained satisfactory, with a loan loss ratio of 1.6 percent against a non-performing loan ratio of 1,7 percent, well within the Bank’s appetite.
Total income for the period amounted to $10.4 billion, an increase of 57 percent over the total income earned in the corresponding period in 2021 which amounted to $6,6 billion.
“This was supported by an improvement from underlying business, with net interest income and net fees and commissions having increased by 12 percent and 18 percent respectively,” said McSharry.
He added that a 290 percent increase in foreign exchange trading income also contributed significantly to income growth, underlining the effects of exchange rate movements and growth in foreign currency denominated business during the period. During the period under review, operating expenses increased by 34 percent from $4,5 billion in the first half of 2021 to $6,1 billion in the period under review.
“However, an improvement in general cost efficiency was noted with the cost to income ratio having moved from 68 percent in June 2021 to 58 percent in June 2022,” said McSharry.
The bank posted a profit of $471,9 million for the 6 months to June 2022, a slight reduction of 2 percent from $483,8 million recorded for the same period in 2021.
Mr McSharry said that this follows a significant increase in the monetary loss of 701 percent and a higher tax charge increase of 116 percent computed for 2022.
He said that the total comprehensive income for the period, after incorporating revaluation credits on assets and the investment portfolio, amounted to $5,3 billion for the 6 months to June 2022, 598 percent higher than the $754.4 million reported for the corresponding period in 2021.
During the period under review, the Bank procured an EUR12,5m open line of credit from the European Investment Bank (EIB).
Mr McSharry said that this is a medium-term facility running up to 7 years and is expected to provide capital funding for mid-cap customers.
“This is a critical intervention coming at a time when the economy is showing signs of a rebound,” he said.
In terms of innovation through product development, Mr Mcsharry said that the Bank is committed to providing its customers with relevant products and services that support their individual needs.
“This is being achieved on the back of strong relationships with like-minded technical and business partners.
“Recent partnerships with Money Transfer Agencies, RIA and HelloPaisa were followed by the successful launch of Western Union resulting in increased options for customers,” he said.
He added that the bank launched a series of innovative enhancements on its Mobile App, creating a 360-degree banking experience with multiple functionalities.
Additionally, “a gold card with improved security features for those who travel or make payments online was successfully launched during the period. The Bank will continue to build a presence in the innovation space and capitalise on opportunities,” he said.
McSharry said that the rapid devaluation of the exerted pressure on capital resulted in the bank’s US dollar denominated core capital having reduced from US$74,8m as at December 31, 2021 to US$44,4 million as at June 30, 2022.
He said that this level is still above the regulatory minimum of US$30 million with a comfortable margin of safety being maintained.
The bank’s capital adequacy ratio remained strong closing the period at 34 percent which is well above the regulatory minimum of 12 percent.
Online Reporter