Interest income spurs First Capital Bank's first-quarter revenue growth

KINGSTONE ZIMUNYA

HARARE — During the first quarter of 2024, VFEX-listed First Capital Bank enjoyed a 40% growth in total income; driven by strong performance in net interest income, as well as non-funded income.

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Starting strong — First Capital Bank enjoyed a 40% increase in revenue in the first quarter of 2024.

The income was before once-off fair value adjustments.

In a first-quarter trading update, company secretary Sarudzai Binha revealed that the Bank’s total income closed off at US$20.5 million, from US$14.6 million for the same period in 2023.

"The Bank accelerated lines of credit and interest income was bolstered by a 15% increase in the loan book to US$91 million as at 31 March 2024 from US$79 million recorded as at 31 March 2023," the statement continued.

The Bank's total deposits also increased, though marginally, to US$132 million as at 31 March 2024, which reflects general market apprehension.

The update revealed that the Bank has mobilised an additional US$15 million line of credit from the African Development Bank so as to boost their funding position.

This brings the total available facilities from various regional and international funders to US$48.5 million. Credit drawdowns increased from US$2.9 million to US$16.5 million between March 2023 and March 2024.

Sectoral redistribution was cited as one of the interventions the Bank undertook to improve its non-performing loan ratio (NPL), which closed at 7% as at 31 March 2024, from 8% in December 2023 and 13% as at June 2023.

The Bank also finds itself comfortably capitalised — with a capital adequacy ratio (CAR) of 35%; a 25% increase, and well above the regulatory threshold of 12%.

"At US$58.2 million, core capital remained comfortably above the regulatory absolute threshold of US$30 million, and liquidity ratios remained above the minimum regulatory requirement of 30% throughout the period under reporting," the statement disclosed.

However, as with most blue-chip entities in Zimbabwe, cost pressures remained elevated for First Capital Bank during the first quarter.

Operating expenses rose by 12% to US$10.4 million in the first quarter of 2024, compared to the same period in 2023.

With operations in Botswana, Malawi, Mozambique and Zambia, First Capital Bank entered the Zimbabwean market in 2018 after a buyout of UK-based Barclays Bank's business unit in Zimbabwe.

As at close of business on Thursday afternnon, FCB's shares were trading at US$0.031 on the VFEX, an 18% increase from the opening price of US$0.0261.