FBC Holdings posts ZWG$600 million profit, despite...

FBC Holdings posts ZWG$600 million profit, despite monetary loss

Audrey Galawu

Assistant Editor

FBC Holdings Limited reported a profit before tax of ZWG$669.7 million, driven by an operational profit of ZWG$1.4 billion, though the results were weighed down by a monetary loss of ZWG$774 million.

Group chairman Herbert Nkala attributed this monetary loss to the impact of the hyperinflationary environment on the group's net financial assets during the first quarter of the year.

The company recorded total income of ZWG$2.1 billion for the period, with its core revenue streams—net interest income and insurance services—showing notable growth. However, other income, which includes net foreign currency trading, financial asset gains, and fair value gains on investment properties, saw a significant decline compared to the same period last year.

“This decrease was primarily due to the stabilisation of the local currency, the ZWG, following its reintroduction on April 5, 2024. The relative stability of asset prices during the second quarter also contributed to the lower income.”

Operating costs for the period stood at ZWG$659 million, reflecting the mixed macroeconomic conditions experienced in the first half of the year. While inflationary pressures were felt in the first quarter, there was a notable improvement in cost management due to relative economic stability in the second quarter.

FBC Holdings' balance sheet strengthened, with total assets rising to ZWG$9.99 billion, largely boosted by the acquisition of FBC Crown Bank Limited, formerly Standard Chartered Bank Zimbabwe. The group's assets and liabilities are predominantly denominated in foreign currency, which has enhanced its financial stability and helped preserve value. Shareholder funds increased by 31%, from ZWG$1.8 billion at the end of 2023 to ZWG$2.4 billion, reflecting the group's solid financial performance and capital growth.

The Reserve Bank of Zimbabwe has confirmed that the banking sector remains stable, though liquidity challenges continue to impact credit availability for supporting economic growth. As a result, various banking institutions, including FBC, are exploring alternative regional and global funding options.

“The group’s strategic focus remains on liquidity mobilisation to support balance sheet growth and meet customer funding needs. Despite the high credit risk in the market, FBC’s loan portfolios are performing well and remain within regulatory thresholds. Meanwhile, the group's insurance subsidiaries are trading profitably, with expectations for this positive trend to continue in the second half of the year. Operations in Botswana are also on track, and the group anticipates significant returns from its investments there,” Nkala added.

FBC Holdings is looking to expand its market presence by focusing on micro-insurance and diaspora insurance products, in addition to its traditional insurance offerings, as part of its broader goal of promoting financial inclusion.