HARARE, March 22 (The Source) – Financial group FBC Holdings on Wednesday reported a 21 percent increase in after-tax profit from $18,1 million recorded in the previous year to $21,9 million on improved total income from banking operations.
Total net income increased by 13,5 percent from $81,9 million in the preceding year to $93 million driven by a 22 percent increase in net interest income from $36,6 million previously to $44,8 million. Fees and commision income also increased by 24 percent to $25,9 million in the period.
“The aforementioned revenue lines benefited from an improvement in net interest margins and increased transaction volumes due to widespread adoption and use of e-commerce driven platforms.”, chair Herbert Nkala said on Wednesday.
However, the insurance business recorded a decline in both gross premium written (GPW) and net premium written (NPW) of 8 percent to $32,7 million and 15 percent to $18,8 million, respectively, on the back of depressed insurable market values.
The group’s cost to income ratio improved from 74 percent to 72 percent due to improved income offsetting the increase in operating costs.
Total assets of the group increased by 24 percent from $490,6 million recorded in the previous year to $610,1 million.
The group’s banking unit, FBC Bank Limited’s net income increased by 23,8 percent from $38,5 million in the preceding year to $47,7 million.
FBC Bank Limited also recorded an improvement in the quality of its book, with non-performing loans declining from 7,9 percent in the previous year to 4,3 percent as a result of cautious lending.
“The bank’s lending portfolio marginally declined by 3 percent from $208,9 million to $202,3 million as it continues to pursue a cautious lending approach with asset quality being key priority”, chief executive John Mushayavanhu said.
Core capital for FBC bank limited stood at $65 million against $25 million required by the central bank and management is confident the bank will meet the $100 million RBZ minimum capital requirement by 2020.
FBC Building Society’s, net income increased by 21 percent from $12,9 million recorded in the preceding year to $15,6 million.
FBC building society’s core capital stood at $41,3 million as at December 31, far above the $25 million prescribed minimum capital requirement for building societies by 2020.
Additionally, total assets of the building society rose by 18 percent to $147,7 million from $124,8 million recorded in the previous year while total deposits increased by 14 percent from $85,3 million in the previous year to $96,9 million. The building society’s non-performing loans decreased from 8 percent to 5,92 percent even though loan and advances increased marginally from $58 million in the previous year to $58,4 million.
FBC’s reinsurance unit recorded a 17 percent decline in gross premium written (GPW) from $17,8 million in the previous year to $14,8 million on the back of weak demand for insurance products. As a result, profit before tax dropped 10 percent from $2,5 million recorded in the previous year to $2,3 million.
Mushayavanhu said Eagle insurance company recorded a 2 percent decline in gross premiums written to $18,6 million, adding that the company will soon be rebranded as FBC Insurance Company.
Mushayavanhu told analysts that the group holds treasury bills (TBs) worth $76,1 million and in the period, total income received from the TBs amounted to $11 million. He said $7,3 million of the total TBs is categorized under acquisition of non-performing loans by Zamco while the remaining $67,8 million were issued under government budgetary support.
Mushayavanhu said FBC was confident that the government will continue to honour its obligations on maturing TBs.
“Government has consistently paid…. each time there is maturity, bond interest and capital are being paid,” Mushayavanhu told analysts.