FCB secures US$20m from Afreximbank FCB says it is close-to-full utilisation of the e12,5 million European Investment Bank (EIB) line of credit, which has provided crucial capital relief to medium-sized corporate clients. (File Picture)

Enacy Mapakame

Business Reporter

Victoria Falls Stock Exchange (VFEX) listed banking group First Capital Bank (FCB) says it has secured a US$20 million line of credit from the African Export-Import Bank (Afreximbank), currently in the drawdown stage.

In an earnings update for the half year to June 30, 2023, FCB also indicated it was close-to-full utilisation of the e12,5 million European Investment Bank (EIB) line of credit, providing crucial capital relief to medium-sized corporate clients.

These strategic moves underscore the group’s commitment to supporting its clients’ growth and bolstering its own financial foundation.

FCB, which became the first bank to list on the VFEX recorded its operating profit after tax for the first six months of 2023 jumped 602 percent to US$9,05 million, compared to US$1,29 million reported in the same period the previous year.

The group attributed this to several factors, including an expanded customer base, significant growth in the loan book, and notable gains in foreign exchange.

The growth also translated into earnings per share of US$0,42 cents for the period, which represented a 600 percent increase over the comparable period the prior year.

According to the group, this feat was substantiated by a growth in income over the period, totalling US$32,1 million propelled by marked improvements in the underlying business, with net interest income and net fees and commissions climbing by 35 percent and 23 percent respectively.

However, operating expenses also experienced a 22 percent increase, rising from US$16,6 million to US$20,3 million in the current period.

Consequently, the cost-to-income ratio moved from 58 percent in June 2022 to 63 percent in June 2023.

During the period under review, total deposits stood at US$109,5 million reflecting a decline from US$136,1 million reported during the same period in the prior year.

This decrease was primarily a result of the devaluation of Zimbabwe dollar-denominated deposits due to a significant 735 percent depreciation of the ZWL over the period.

Notably, Zimbabwe dollar deposits constituted 8 percent of the total deposits at the end of June 2023, a decrease from 22 percent recorded at the end of 2022.

On the other hand, US dollar-denominated deposits experienced a 6,6 percent increase during the review period. Meanwhile, loans to customers showcased an impressive 23 percent growth over the same timeframe, reaching US$79,5 million compared to US$65,9 million as of December 31, 2022. Notably, 95 percent of business has been underwritten in US dollars by June 2023, signifying a strategic approach to risk mitigation.

During the period FCB showcased resilience in its capitalisation and liquidity management strategies.

The period experienced challenges emanating from inflationary pressures coupled with global pressures.

Its US dollar-denominated core capital experienced a marginal 2 percent decrease, settling at US$48 million as of June 30, 2023, compared to US$49 million recorded on December 31, 2022, above the regulatory minimum of US$30 million. The bank’s capital adequacy ratio stands strong at 37 percent, significantly surpassing the regulatory requirement of 12 percent.

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