FIRST Capital Bank Zimbabwe’s consolidated adjusted after-tax profit for the year ended 31 December 2023 amounted to US$15.4 million, 26% higher than US$12.2m posted in the corresponding prior year period.
KELVIN JAKACHIRA
The bank’s core capital increased by 3% from US$50.9m as of 31 December 2022 to US$52.5m as at 31 December 2023. This level is above the regulatory minimum of US$30m with a comfortable margin of safety being maintained.
The bank’s capital adequacy ratio remained strong, closing the period at 28%, which is well above the regulatory minimum of 12%. With a liquid assets ratio of 52%, the bank carried a comfortable buffer above the regulatory minimum of 30% representing capacity to underwrite more business.
The board has declared a final dividend of US0.22 cents per share. This brings the total dividend for the year ended 31 December 2023 to US0.36 cents per share.
In his outlook, First Capital Bank chairperson Patrick Devenish said: “Looking ahead, growth prospects for the Zimbabwean economy for 2024 are expected to be subdued on account of the El Niño weather phenomenon and its impact on the 2023/2024 summer cropping season, as well as reduced earnings from mining as a result of low levels of global commodity prices. The rapid devaluation of the Zimbabwean dollar experienced at the start of 2024 creates added pressure on economic performance and underlines the challenge for monetary authorities to find a lasting solution to engender market confidence.”
Devenish said as a growing bank, to consolidate its commitment to Zimbabwe, it has firmly established its roots and commenced the construction of a head office that is inspired by the desire to project the bank’s contribution to environmental stewardship.
“Our listing on the Victoria Falls Stock Exchange further consolidates our commitment and positions the bank strategically to attract high quality funding and make a lasting contribution to the growth of the economy,” Devenish said.
“We continue to grow our business based on the collaborative efforts of all our valued stakeholders. I would like to extend my sincere gratitude to our customers for their trust and belief in our business ethos and the values that are at the core of our operations. Their resolute support encourages us to do more.”
He said the global economy remained weak, saddled with the continuation of inflationary pressures and rising interest rates in the wake of increasing geo-political tensions.
Suppressed global demand elicited tighter monetary and fiscal policies in advanced economies. In the January 2024 edition of the World Economic Outlook report, the International Monetary Fund estimates the global economy to have grown by 3.1% in 2023, a reduction from the 3.5% achieved in 2022.
“Global inflation is estimated to have declined from an annual average of 8.7% in 2022 to 6.8% in 2023 with a further improvement projected in 2024 to 5.8% grounded on the easing of supply side issues and continuation of restrictive monetary measures. Broadly, these inflation projections still remain above long-term averages recorded during the pre-Covid era with similar trends having been observed also in developing countries,” Devenish said.
“Against the backdrop of sustained headwinds, the local economy is estimated to have grown by 5.5% in 2023 slower than the 6.5% achieved in 2022. A fragile currency management framework saw the Zimbabwean dollar depreciating by 788% during the year to close at ZW$6,104.00 against the US dollar, creating a pass-through effect on local currency inflation. Measured on a currency weighted basis, year-on year blended inflation closed 2023 at 26.52% compared to a restated 56% at the end of 2022.”
The bank said the EUR12.5 million European Investment Bank (EIB) line of credit was 81% fully drawn during the period under review providing significant capital funding relief to medium-sized corporate customers.
A further US$20 million line of credit has been mobilised with the African Export-Import Bank (Afreximbank) with US$6m already drawn down as at 31 December 2023.
The bank continues to engage various financiers for additional lines of credit with the African Development Bank and the Trade Development Bank at varying stages.
“We continue to unlock the extensive capabilities of our core banking system to realise value for our stakeholders,” the bank said.
“Our aim is to reduce cost-to-serve and also bring transactional convenience through continuous innovations and smart partnerships with global brands.”
“Our approach began with the enhancements of existing platforms to significantly improve the service experience and bring more relevant options. This included initiatives such as USSD upgrade, ZIMRA on mobile, USD POS acquiring, USD-denominated bill payments, security enhancement through FCB secure, Zinara licensing in-branch and strategic alliances with global brands such as Emirates.”
New products such as sole trader account, low-cost accounts, host-to-host (a seamless payments platform for corporates), US dollar individual and group savings were also introduced.
“We have made consistent efforts in capacity building through a robust up-skilling framework. We continue to impact the youth through our internship programmes and more than 30 interns and graduate trainees were able to access unique learning opportunities in the year under review,” said the bank.
