First Capital Bank (FCB) has secured an additional US$15 million credit facility from the African Development Bank, raising its total funding from regional and international sources to US$48.5 million.
In a trading update for March 31, 2024, the bank announced that these increased facilities would strengthen its ability to support the anticipated economic recovery.
“These funds will significantly enhance the bank’s capacity to support growth in key economic sectors and facilitate the expected economic rebound,” stated Sarudzai Binha, the company secretary.
Currently, several banks in Zimbabwe are leveraging funds from AfDB to support export-oriented local companies, particularly in the agriculture sector.
Zimbabwe’s real GDP growth is forecasted to slow to 3.3 percent in 2024, partly due to the impact of the El Nino-related drought and lower commodity prices.
For the reviewed quarter, the bank’s total income, before one-time fair value adjustments, increased by 40 percent to US$20.5 million, up from US$14.6 million in the same period in 2023. This growth was driven by strong performance in both net interest income and non-funded income.
“The bank’s accelerated lines of credit and interest income were bolstered by a 15 percent increase in the loan book, reaching US$91 million as of March 31, 2024, compared to US$79 million on March 31, 2023,” said Ms. Binha.
Reflecting general market caution, total deposits increased slightly to US$132 million during the review period.
Ms. Binha explained that funding was augmented by increased credit line drawdowns, which rose from US$2.9 million to US$16.5 million between March 2023 and March 2024.
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She noted that cost pressures remained high, with operating expenses rising by 12 percent to US$10.4 million in the first quarter of 2024 compared to the same period in 2023. A rigorous rationalisation and optimisation exercise is currently underway to control cost increases.
The bank’s non-performing loan ratio (NPL) continued to improve, dropping to 7 percent as of March 31, 2024, from 8 percent in December 2023 and 13 percent in June 2023, following various interventions to improve asset quality.
“The bank’s capital increased by 25 percent during the quarter, with the capital adequacy ratio (CAR) at 35 percent, well above the regulatory threshold of 12 percent. Core capital stood at US$58.2 million, comfortably above the regulatory absolute threshold of US$30 million, and liquidity ratios remained above the minimum regulatory requirement of 30 percent throughout the period,” said Ms. Binha.
She emphasized that the bank remains optimistic about medium-term growth prospects by diligently harnessing opportunities while maintaining robust risk and cost management.
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