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FCB forex indexed loans rise

BY FIDELITY MHLANGA

FIRST Capital Bank (FCB) says it grew foreign currency indexed loans to US$18,7 million during the half year ended June 30, 2021, as United States dollar-based deposits increased during the period.

Foreign currency indexed loans were valued at US$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 he had seen a big shift to foreign currency indexed loans recently.

Appetite to lend 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 extend more foreign currency-based loans by rising levels of United States dollar deposits as Zimbabwe’s economy slowly returns to full dollarisation.

“During the period under review, the bank’s total deposits have, in historic terms, grown to $9,8 billion, an 11% increase from $8,8 billion recorded in December 2020. Foreign currency loans grew to US$18,7 million in June 2021 from US$1 million in December 2020, driven by the growth in foreign currency deposits,” FCB said, noting that it was keenly watching developments on the inflation front.

FCB’s total income 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 profit for the period declined to $165, 9 million, from $423,2 million 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 look forward to a second half characterised by further growth in loans and deposits in both local and foreign currency whilst maintaining a quality loan book.”

It noted that the Covid-19 outbreak, which affected operations most of last year, had accelerated focus on the bank’s digital capabilities.

“With increased system stability, we took decisive actions by investing resources towards digital platform development and enhancements,” the bank said.

“Our expanding digital product suite continues on a growth trajectory that has led us to the launching of services that allow customers to transact from anywhere at any time.”

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