BY MISHMA CHAKANYUKA
FIRST Capital Bank, formerly Barclays Bank Zimbabwe, has adopted an ‘ever-changing’ strategy going forward due to the monetary policy changes made in the country this year.
This comes as banks are sceptical of government over its flip flops concerning its monetary policy.
In a statement accompanying the company’s financial results for the period ended June 30, 2019, First Capital Bank chairman Sydney Mtsambiwa said the bank expects the macro-economic environment to remain in transitional mode into the foreseeable future.
“Key monetary policies pronounced culminated in the removal of the multi-currency system and adoption of the Zimdollar as the sole legal tender. This was a major adjustment, impacting both business and transacting public. The bank is continuously monitoring these policy changes, and adapting its strategy as appropriate. While doing this, the bank also continues to assist its clients to understand and navigate the policy changes,” he said.
Going forward, he said “the recent investment in the new information technology systems by the bank will provide an enhanced digital product offering and improved customer experience. The bank remains focused to deliver superior value to its customers and broader stakeholders on a sustainable basis into the future”.
During the period under review, the bank registered a profit after-tax of $68,1 million, translating to basic earnings per share of 3,16 cents for the period from a 2018 comparative of 0,63 cents.
While this is an increase from the comparative 2018 period of $13,61 million, it must be noted that earnings from last year were valued in United States dollars.
“A significant part of earnings reflects the revaluation of investments, which includes the effect of change in the functional currency. The underlying trading result takes into account costs associated with the migration of the bank’s information technology systems,” Mtsambiwa said.
Net fee and commission income grew by 74% in the period under review to $23,45 million from a 2018 comparative of $13,5 million. The growth included the effect of the exchange rate.
However, growth in net interest income remained largely flat at $19,34 million in the period from a 2018 comparative of $18,85 million with the latter figure having a US$ value.
The bank’s loans and advances to customers were up at $270,12 million from a 2018 comparative of $143,12 million. Mortgage, personal and term loans dominated this space.
Assets grew by 144,14% to $1,44 billion in the period under review from a 2018 comparative of $590,4 million. The growth was due to a huge increase in cash and bank balances of nearly 900% to $790,51 million from 2018 value of $83,53 million. As such, this could be attributed to exchange gains following the reintroduction of the Zimdollar.
In terms of capitalisation, the total regulatory capital base closed at $229 million, of which the core capital was $174 million as at end of the reviewed period.
The core capital remained higher than the central bank stipulated amount of $100 million as the Reserve Bank of Zimbabwe has not changed the levels despite the reintroduction of a local currency.
“The bank’s total capital adequacy ratio closed the half year at 29% up from 25% in June 2018. This is above the minimum requirement of 12% and it reflects significant capacity to deploy more assets. The bank’s liquidity ratio at 58% remains significantly above the regulatory minimum of 30%,” Mutsambiwa said.