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FBC Holdings will soon go to the market to raise $15 million through a five-year bond as part of a plan to manage down the cost of funds.

Chief executive John Mushayavanhu told the annual general meeting last week that the group’s priority was on reducing the cost of funding as well as having stable and longer tenure deposits.

“Focus on this will help us improve pricing of our lending to the productive sector and also help reducing non-performing loans. We will therefore shortly be in the market to raise $15 million through a five-year bond at a single-digit interest rate in an effort to manage down our cost of funds.”

Mr Mushayavanhu said the group had seen a reduction in non-performing loans through aggressive collections, tighter loan origination and workouts.

“We managed to reduce the NPLs significantly. We should end the half-year with our NPLs below the 2014 year-end figure of 16,5 percent and also below the current national average of 15,19 percent at March 31, 2015,” he said adding that in the first five months of the year, the group had managed to obtain repayments totalling $1,8 million from loans previously graded as non-performing and on which interest was suspended.

Significant progress had also been made in finding market solutions to rehabilitate other NPLs.

He said in the five months to May, the group operated profitably.

“All our businesses with the exception of only FBC Securities have been profitable. Following the disposal of Turnall, the predictability of earnings had now stabilised and management is now focused on the core business of banking and insurance.”

Mr Mushayavanhu said significant strides had been made in the areas of cost containment, given that the country is experiencing negative inflation.

“We have therefore managed to keep costs flat compared to last year.”

He said the bank was operating ahead of budget, performance which had been achieved due to the available liquidity and lines of credit which had enabled the bank to lend to the market at reasonable rates.

“We are one of the few banks that are liquid and to that end we have been able to sweat those funds by participating in Aftrades as a lending bank. Only four banks are able to lend to other banks. To date, we have invested $15 million in the facility.”

The bank has maintained its market share of deposits and loans and also capitalised in excess of the minimum capital requirements of $25 million.

“We are also on target to meet the $100 million capital requirement for 2020 in terms of the recapitalisation plan which we submitted to the Reserve Bank of Zimbabwe.”

Mr Mushayavanhu said the building society is on target on its budgeted housing projects for 2015.

“We have completed Masotsha Ndlovu phase three (18 units) and are finalising Masotsha phase four again with 18 units.”

He said the group will construct and sell two more projects this year, mainly Rossal Road in Greendale (24 units) and Arcturus Road in Greendale (20 units).