ZIMBABWE Stock Exchange-listed financial services group FBC Holdings (FBCH) has reported an $8,2 million profit for the six months to June compared to $6,9 million achieved during the same period last year, buoyed by growth in incomes.
Report by Business Reporter
The group’s total income recorded an increase of $0,1 million to $36,8 million from $36,7 million despite a Reserve Bank of Zimbabwe directive to cap interest rates and bank charges.
“Despite the harsh economic environment, the group sustained a positive performance, achieving a profit before tax of $10 million for the six months ended June 2013. This was driven by increased revenues from the financial services businesses as cost containment,” group chairman Herbert Nkala said.
“The increase was weighed down by the mandatory reduction of bank charges and interest margins as stipulated in the memorandum of understanding signed between the banking industry and the Reserve Bank of Zimbabwe. In addition, the subdued performance of the manufacturing sector also weighed down revenues.”
He said the group’s income was expected to increase in the second half of the year buoyed by increased volumes as well as growth in revenue inflows from the group’s manufacturing associate, Turnall.
The group’s cost to income ratio, according to Nkala, improved to 73% from 75% compared in the corresponding period last year as a result of improved cost containment.
Operating costs were, however, 2,8% up to $21,7 million.
Turning to the group’s plans to capitalise in line with new central bank requirements, Nkala said: “While all the hurdles have been cleared, the bank and the (building) society are still operating as separate legal entities as we await formal pronouncement from the central bank with regard to the capitalisation time.
“In the event that that the capitalisation deadline remains the same, the bank and the society will be merged into one to comply with the capital requirements.”
Early this year, FBC Holdings embarked on a restructuring exercise which resulted in the National Social Security Authority 40% shareholding in FBC Building Society being tranfered to the parent company through a share swap.
This would subsequently result in NSSA’s shareholding in FBCH increasing to 35%.