First Capital records 42% increase in total income

Bridget Mabanda

First Capital Bank Limited said it recorded a 42 percent increase in total income, while loans to customers increased by 85 percent on December 31, 2022.

In its audited results for the year ended December 31, the Victoria Falls Stock Exchange-bound financial institution said the spike in loans is reflective of an increase in credit appetite which, for many borrowers, was constrained by reduced absorption capacity when interest rates were reviewed upwards.

“The loans to deposit ratio increased marginally from 44 percent on December 31, 2021 to 48 percent as of December 31, 2022. Total income grew from ZWL$25.9 billion in 2021 to ZWL$36.7 billion and loans to customers raised from ZWL$24.6bn at the end of 2021 to ZWL$45.3bn in 2022,” reads part of the audited results.

Net interest income increased by 37 percent following a 77 percent increase in interest earning assets.

A profit after tax decreased by 27 percent reduction from what was achieved in 2021 but, operating profit, excluding the impact of property valuations increased by 57 percent.

The bank said due to growth in deposits, a total balance sheet increased by 55 percent from ZWL$104.0bn on December 31, 2021 to close at ZWL$160.8bn on December 31, 2022.

It said the funding of the balance sheet generally remained transient in nature, resulting in a significant level of resources, 33 percent in 2022 and 30 percent in 2021, being carried in the form of cash and bank balances to meet customer transactions.

The bank said it will protect the balance sheet from inflation through:

Deepening market intensity in underlying business leveraging digital capabilities and robust relationship management, increased focus on foreign currency denominated business supported by own deposits, lines of credit and offshore facilities and increased investment in physical assets; acquisition of banking properties, construction of new head-office.

During the year under review, the financial institution expanded its money transfer partner network improving general convenience for its customers.

Lines of credit were negotiated with the European Investment Bank (EUR12.5m) and Afreximbank (US$20m) and are at varying stages of disbursement.