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Business Reporter
Listed financial services group, FBC Holdings reported an increase in profitability in the first half-driven by strong revenue generation capacity and reduction in cost of funds.

All the group’s subsidiaries contributed positively to the group’s earnings during the period. In the six month period, after tax profit increased to $9 million from $8 million last year.

The financial services group recorded total income of $46,6 million, a 16,8 percent increase on the $39,9 million achieved in the same period last year as a result of increased interest income. Net interest income for the period grew 36,6 percent to $22,5 million contributing 48 percent of total income, up from 41 percent last year.

“The growth in net interest income was mainly driven by an improvement in the cost of funding, overall growth in interest earning assets and the re-classification of suspended interest income to earned interest income, following the performance of some material non-performing loans,” said FBC Holdings group chief executive John Mushayavanhu.

Net fees and commission income for the period recorded a growth of 15,9 percent to $12,5 million from $10,8 million as a result of an increased volume of electronic transactions.

Loans and advances for the period were down 6 percent to $267,1 million from $283 million as the financial institution remained cautious on lending.

Non-Performing loans ratio of 8,6 percent was achieved ahead of the June target of 10 percent. FBC Holdings did not dispose of any bad loans to the Zimbabwe Asset Management Company but instead increased the loan impairment provision.

Total deposits for the period went up 21 percent to $435,6 million from $360,7 million , a situation mainly reflective of the current cash situation.

The group’s statement of financial position at $575 million registered a 17 percent growth on December 31, 2015 position of $471 million.

The growth in the statement of financial position was mainly driven by a 21 percent increase in total deposits compared to the December 2015 position.

Mr Mushayavanhu said the group has remained visible in the market during the period under review.

He said Micro-Plan which is the group’s non-deposit taking micro-finance institution continues to implement its rural finance outreach strategy through a collaborative arrangement with Care international.