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Conrad Mwanawashe Business Reporter
FBC Holdings Limited has recovered, with interest, every “cent” invested in Lobels Bread but suffered a $9 million loss in the divestiture from Turnall Holdings Limited during the year to December 2014.

The banking group exited from its 58 percent shareholding in Turnall, a non-core manufacturing company, which had been part of the FBCH group since 2009, to focus entirely on its financial services through a dividend in specie.

FBCH had to absorb its attributable share of Turnall’s losses from January 1 2014 to the date of the dividend (October 17, 2014).

In addition, the group had to recognise the reduction in the fair market value of its investment in Turnall as at October 17.

“As a result, the group incurred local extraordinary charges of $9 million related to this exit strategy and the eventual disposal of its investment in Turnall,” FBCH chief executive officer Mr John Mushayavanhu told an analysts briefing on the year to December 2014 results.

“While this divestiture was costly to the group, it was the right action to take and the group will produce stronger results with its focused approach on its core competence,” he said.

FBCH’s total net income registered a growth of eight percent to $77 million from $71 million achieved last year. Net interest income grew by 14 percent to $29 million from $25 million recorded last year and its contribution to total net income increased to 37 percent from 35 percent last year.

This was driven by the growth in loans and advances and mortgages on the back of increased deposits and credit lines.

FBC Bank’s contribution to group slowed down due to the Turnall investment.

Mr Mushayavanhu said 40 percent of the 60 percent in Turnall sat in the bank.

He said the disposal of Turnall has, however, improved the quality of revenue and asset base of the bank.

Negotiations for new lines of credit are ongoing and the group has been granted permission to commence writing life and health business this year under FBC Reinsurance.

“This new line of business will ensure that the company, which has been in business for 20 years, offers the full spectrum of reinsurance services to both the short term and long term markets.

FBC Reinsurancehas also put in place retrocession arrangements with top rated specialist markets covering businesses against risks associated with political riots and terrorism as well as cyber risks,” said Mr Mushayavanhu.

He said the $60 million Syndicated Loan Facility from Standard Chartered Bank, Commerzbank and Investec, guaranteed by Afreximbank enabled the bank to restructure facilities for its key clients.

“We stabilised our liquidity position,” he said.