Staff Writer

FBC Bank declared a half year interim dividend of 29.76 ZWL cents per share, when it also reported an 84% decline in half year profit.

The Bank’s after profit came in lower at ZWL$529.13 million in H1 2021 from ZWL$3.33 billion in the comparative period last year. The decline was attributed to an increase in insurance commission expense and claims and loss adjustment expenses. The financial provider also realized a monetary loss of ZWL$678 million from a monetary gain of ZWL$316 million in H1 2020.

Total income for the group declined 34% to ZWL$4.75 billion.

“The group’s subdued total income outturn was largely influenced by a 76% reduction in net trading and dealing income, following the stabilisation of the ZWL interbank exchange rate against all the major currencies, bolstered by the foreign exchange auction system.

“The significant reduction in this revenue line was counterbalanced by a strong growth in other core business revenue streams,” said group chairman Herbert Nkala.

Net interest and related income was 43% ahead of the prior year’s corresponding period, at ZWL$1.33 billion, leveraging on the group’s 12% growth in loans and advances.

In the period, FBC reduced its minimum lending rate during the period under review in order to assist customers in coping with the Covid-19 induced low economic activity and reduced demand.

Fee and commission income surged by 89% to ZWL$1.12 billion, partly supported by the group’s digitalisation thrust which enhanced retail and service fee performance.

“Transactional volumes have generally been subdued within the financial services sector with most institutions implementing digital solutions to augment business growth,” he said.

The group’s net insurance premium earned rose 40% to ZWL$635.16 million.

“The insurance portfolio has remained susceptible to the subdued economic activity and general reduction of consumer disposable income.”

As a result of improvement in pricing and an increased number of units sold, net profit from property sales was increased by 350% to ZWL$50.97 million. However, the Bank is set to improve this revenue line following significant progress achieved on the Fontaine Ridge project in Harare – Kuwadzana high density suburb.

Group cost to income ratio of 76% was achieved on the back of an 18.6% decline in administrative expenses. This ratio however, is significantly higher than the 39% achieved last year, mainly due to the 34% decline in total income caused by the dip in trading and exchange income.

“The group will continue to implement prudent cost containment measures against declining revenue growth and relative inflationary pressures,” he added – Harare

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