FBC Holdings Limited says it will delay the merging of its sub-units FBC Bank and FBC Building Society as it wants to continue enjoying the non-tax benefits of the building society.
Report by Victoria Mtomba
Building societies in the country are exempted from paying taxes. Building societies are not supposed to be profit-making as they promote mortgage lending.
Under the central bank new minimum requirements banks have up to June 2013 to raise $50 million.
Speaking at an analyst briefing held in the capital yesterday, FBC Holdings chief executive John Mushayavanhu said the group’s after-tax profit surged 25% for the year-ended December 31 2012 to $15,6 million due to the non taxing of FBC Building Society.
Currently, building societies in the country are not taxed by the Reserve Bank of Zimbabwe (RBZ).
“We will be merging the bank and the building society to meet the minimum capital requirements,” Mushayavanhu said.
“Preparatory work is in progress. We will do it even on the midnight of June 30. We will take our time.”
He said the bank had not yet received official correspondence from the central bank on the relaxation of the deadline for banks to raise the $100 million.
RBZ governor Gideon Gono early this month said banks now had up to 2020 to comply with the revised capital requirements.
He said as at December 31 2012 FBC Bank and FBC Building Society capital insider exposures were at $29 million and $19 million respectively.
The holdings company holds 60% of FBC Building Society, while the National Social Security Authority owns the remainder of the shares.
The company’s total assets grew by 40% to $392 million from $280 million while shareholder equity stood at $67 million for the period under review.
Total income for the group rose by 19% to $74,2 million from $62,2 million in 2011. Earnings per share increased by 36% to
2,42 cents in 2012.
The holding company registered loan and advances to customers of $190,5 million with the company having successfully accessed a total of $67,5 million in lines of credit.
The funds were from Afreximbank, The Create Fund and PTA Bank
During the period under review the loan book recorded a 93% growth driven by mortgages from housing projects.