FBC Holdings Limited has experienced a 269,4% jump in its profit for the year to $18,1 million in 2015 after the group disposed of its non-banking unit and an improved its brand, which lured more deposits.
BY TATIRA ZWINOIRA
In 2014, profit for the year was $4,9 million.
Speaking to NewsDay on the sidelines of the group’s analysts’ briefing yesterday in Harare, FBC Holdings group chief executive officer, John Mushayavanhu said the improved FBC brand enabled them to attract investments at a much lower interest rate.
“The main reason is that we are now back to our core business. As you recall, we exited from Turnall in 2014. So for the whole of 2015 we were operating as a solely financial services company and that made a huge difference to our results,” he said.
“Also, the improved FBC brand enabled us to attract more deposits at a much lower interest rate than what we were paying in the past. So again there were huge savings that we made in the area of interest expense.”
Total income for the group was $82,2 million in 2015 a 5,9% increase from the $77,4 million realised in 2014.
Profit before tax, from continuing operations saw a 24,6% increase to $21,3 million from the $17,1 million realised in 2014.
Total lines of credit from institutions such as the syndicated loan facility from Investec, Commerzbank and StanChart, Afreximbank’s general line and factoring facility, PTA Bank, ZADT, and the Reserve Bank of Zimbabwe’s chrome facility were $97,3 million by the end of 2015.
“The interest we are now recovering from customers is not suspended, but is now going into profits. What worked for us is, first of all, in the lending area, we got to concentrate on SMEs because these are small businesses that do not have excess baggage in the form of legacy borrowing. They usually have a very robust project that they are producing and you can see the cash flows,” Mushayavanhu said.
“In the area of mortgaging, we concentrated on low cost housing, in other words most of the units that we are selling are selling at an average price of $100 000, which is well in the reach of the middle income bracket.”