‘Open’ Economy Boosts First Capital Bank Lending

The herald

Enacy Mapakame
Business journalist
Listed banking company First Capital Bank (FCB) said demand for local and foreign loans during the third quarter through September 30, 2021 increased due to the improvement in economic activity seen as a result of the ‘gradual relaxation of lockout restrictions.

The loan portfolio continued to perform well with non-performing loans at 0.19 percent of the loan portfolio.

Total loans increased 27% to $ 6.1 billion, from $ 4.8 billion in the same previous period.

A loan loss ratio of 0.6%, during the six-month period ended June 2021, demonstrated the quality of the loan portfolio, which presented a non-performing loan ratio of 0.14% against a market average of 0 , 3% with loans under supervision constituting 3.3% of the loan portfolio.

Management is optimistic about the economic environment and foresees a second semester characterized by further growth in loans and deposits in local and foreign currencies while maintaining a quality loan portfolio.

While interest rates remained stable in the third quarter compared to the previous quarter, the banking group said they could tend to rise as regulators seek positive real interest rates.

The bank’s figures show that its year-to-date operating profit rose 60% to $ 3.7 billion in inflation-adjusted terms. FCB attributed the growth to increased lending and transaction income.

Year-to-date operating expenses increased 62% to $ 2.6 billion, from $ 1.6 billion recorded in the same period a year earlier.

According to a business update for the quarter under review, year-to-date operating profit excluding investment real estate gains more than doubled to $ 1.5 billion from $ 686 million.

Customer deposits increased 28% to $ 12.6 billion compared to the growth of depositors in local and foreign currencies.

Of the total deposits, foreign currency accounts accounted for 46 percent.

Despite the growth, the period under review has seen its share of challenges.

“The third quarter of the year saw headwinds due to Covid 19 which impacted office hours, hence the decline in transaction levels.

The inflation rate had followed a downward trend, with September’s monthly inflation being below 5%.

“However, recent upward inflationary pressures could alter this trajectory. The interbank exchange rate has recently experienced some local currency depreciation after a period of relative stability.

In addition, there has been a noticeable depreciation of the local currency in the informal market, which may lead to increased costs in the short to medium term, ”Acting Company Secretary Sarudzai Binha said in an update. commercial.

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