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First Capital Posts Profit In Q1 On Growth In Forex Transactions

First Capital Bank recorded a profit before tax of ZWL$ 522.8 million in the three months to March 2022, on increased earnings in foreign currency which resulted in exchange rate gains at a time the local currency experienced its rapid decline in over a year.

The Bank’s total income for Q1 2022, at ZW$2.4bn was 37 percent ahead of the ZW$1.7bn posted for the comparative period in 2021.

“This is on the back of strong performance in both Net Interest Income and Non-funded Income which increased by 37% and 36% respectively on the back of an increase in underlying business and customer transactions in the wake of reduced COVID-19 restrictive measures,” the bank said in its Q1 update.

About 20 percent of the Bank’s income for the quarter was earned in foreign currency with the business outlook suggesting an increased contribution going forward.

However, operating expenses increased by 18 percent, reaching ZW$1.4bn in Q1 2022 compared to ZW$1.2bn recorded in Q1 2021.

As a result, the Bank recorded Profit Before Taxation of ZW$522.8mn for the quarter, a 349% increase from the ZW$116.4mn recorded in the corresponding period in 2021.

Total assets increased in real terms by 29% on year-to-year.

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However, on a year-to-date basis, the balance sheet has remained largely flat between December 2021 and March 2022 with total assets increasing by 2 percent, deposits increasing by 2 percent whilst equity reduced by 5 percent following adjustment for the 2021 final dividend of ZW$834mn.

Gross advances however increased by 15 percent, closing the quarter at ZW$10bn from ZW$8.7bn on 31 December 2021, reflecting increased appetite from both the productive and consumptive sectors.

Asset quality remained strong with a non-performing loan ratio of 0.2 percent being recorded at the end of Q1, 2022 down from 1 percent recorded at the end of 2021. The Bank’s capital position remained strong with a satisfactory margin of safety above the US$30mn threshold

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