BY FIDELITY MHLANGA
FIRST Capital Bank (FCB) says it increased foreign currency indexed loans to $ 18.7 million during the six-month period ended June 30, 2021, as US dollar deposits increased during the period.
The foreign currency-indexed loans were valued at $ 1 million at the end of last year, the bank said in its financial statements for the six months under review.
The commercial banking giant spoke as Reserve Bank of Zimbabwe Governor John Mangudya said last week that he had seen a big shift towards foreign currency indexed loans recently.
The appetite for lending has been boosted by lower levels of non-performing loans across the sector, which was estimated at 0.3% during the first half of this year.
This figure was 0.14% at FCB, which said 3.3% of its loans were under the watch list during the review period.
But banks have also been encouraged to make more foreign currency loans by increasing levels of US dollar deposits as the Zimbabwean economy slowly returns to full dollarization.
“During the period under review, the bank’s total deposits, in historical terms, grew to $ 9.8 billion, an increase of 11% from the $ 8.8 billion recorded in December 2020. Loans in foreign currency increased to US $ 18.7 million in June 2021 from US $ 1 million in December 2020, driven by the growth of foreign currency deposits, ”said FCB, noting that it was closely watching developments on the inflation front. .
FCB’s total revenue increased to $ 2.27 billion during the review period, from $ 1.71 billion during the same period last year.
Net fee and commission income increased to $ 998.6 million, from $ 622.18 million previously, while net interest income moved to $ 956.6 million during the review period, from $ 474.3 million during the comparable period last year, while earnings for the period fell to $ 165.9 million, from $ 423.2 million in the same period last year.
FCB said the value of its total assets also decreased to $ 16.41 billion during the review period, from $ 17.41 billion during the comparable period in 2020.
“Operating costs were largely driven by inflation between June last year and June this year,” FBC said.
“We are optimistic about the economic environment and we expect a second semester characterized by higher growth in loans and deposits in both local and foreign currency, while maintaining a quality loan portfolio.”
He noted that the Covid-19 outbreak, which affected operations for most of last year, had accelerated the focus on the bank’s digital capabilities.
“With greater system stability, we take decisive action by investing resources in the development and improvements of the digital platform,” the bank said.
“Our expanding suite of digital products continues on a growth trajectory that has led us to launch services that enable customers to transact from anywhere, anytime.”