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First Capital Bank’s RTGS loan book rose two-fold  to $622 million last year, with the growth largely in the third and  fourth quarters, covering the key productive sectors including  agriculture, manufacturing and mining.

The bank, formerly known as Barclays Bank of Zimbabwe, has been  operating under a dual brand since its acquisition by the Malawi-listed  First Merchant Bank about two years ago.

Currently the bank is branded as First Capital Bank in association with  Barclays.

The recorded growth on the back of financial position backed by  deposits both in local and foreign currency. RTGS deposits increased by 74 percent to $879 million, which were  fully deployed into loans.

“The Bank continues to maintain a quality loan book with a loan loss  ratio of 2,78 percent from 1,27 percent in 2018, the increase reflecting  the growth in the loan book,” acting managing director Ciaran McSharry  said in a statement accompanying the results.

The Bank remains on a strong base in terms of liquidity and capital  adequacy ratios. The liquidity ratio was 55 percent compared to the 30  percent regulatory minimum. Similarly capital adequacy at 26 percent was  well above the minimum threshold of 12 percent reflecting the capacity  of the bank to underwrite more loans.

“In the current environment the inherent credit risk continues to be  high and the Bank continues to be focused on prudential lending  practices, with our Non-Performing Loan ratio (NPL) being closely  managed at less than 1 percent” said FCB chairman Patrick Devenish.

FCB reported a loss after tax of $163 million in hyperinflation  adjusted terms and a profit of $264 million in historical terms, which  translates to inflation adjusted earnings per share of $7.57 and  historical $12.26. This was attributed to fair valuation of investment  properties on the back of rising operating costs, exchange loss on the  net open position and subdued interest rates.

From a business perspective, Mr Devenish said, interest rates remained  subdued in the first half and well below inflation with increases  starting to come in the second. He said most local operating costs were  linked to the informal exchange rate.

“This together with rising IT costs also in US dollars resulted in  significant cost increases,” he said.

The Bank is currently developing a plan to ensure that it meets the US$30 million capital requirement by year end.

In first half, the Bank completed the migration of systems including  its core banking platform and ancillary systems. In the second half, it  focused on system stabilisation and maintenance together with building  sustainable growth in its core business.

“Whilst overall performance was undoubtedly impacted by the migration  process we did manage to register significant growth in our Commercial  and Retail businesses, building momentum into 2020,” Mr McSharry said.

The Bank did not declare a dividend.

In the outlook, the Bank would focus on increasing its market share for  deposits, loans and revenue. — New Ziana.