FMBcapital earns US$13m profit, defies Zim crisis

By The Standard and Newsday | Oct. 6, 2021 | 2 Min read

However, interim group managing director Mahendra Gursahani in his market update said the profit was US$1,2 million behind US$14,3 million reported during the comparable period last year.

BY SHAME MAKOSHORI

SOUTHERN Africa-focused banking group FMBcapital on Tuesday said it weathered exchange rate fragilities roiling the Zimbabwean market during the half year ended June 30, 2021, and posted US$13,1 million in after tax profit.

However, interim group managing director Mahendra Gursahani in his market update said the profit was US$1,2 million behind US$14,3 million reported during the comparable period last year.

FMBcapital is Zimbabwe Stock Exchange-listed First Capital Bank (FCB)’s parent company, after taking over assets of the London-headquartered Barclays Bank Plc as it divested out of African markets in 2017.

The firm, with a combined US$1,2 billion asset base, last year said the Zimbabwean unit had emerged among top drivers of group operations.

However, FCB faces one of its toughest phases since the surprise takeover, as Zimbabwe’s exchange rate crisis spiralled on the parallel market during the period under review, diminishing by wide margins and limiting growth opportunities across markets.

While profitable, Zimbabwean banks have been among the hardest hit after de-industrialisation job losses frustrated lending and market ability to absorb loans.

“The group’s subsidiary banks operating in Botswana, Malawi, Mozambique, Zambia and Zimbabwe were all profitable in the first six months of the year despite the ongoing impact of COVID-19 and the hyperinflation accounting in Zimbabwe which produces unavoidable volatility in the reported numbers,” Gursahani said in a statement to NewsDay Business.

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“These results reflect FMBcapital’s resilience and how well our teams and businesses have navigated the pandemic as we continued to serve our customers and deploy relevant and new products onto our markets,” Gursahani added.

“Despite the regular disruptions to operations, the group’s businesses have successfully sustained uninterrupted banking operations,” he added.

The pan-African group recorded growth in its net interest income to US$44,2 million compared to US$29,1 million in the same period last year.

Non-funded income increased to US$32,5 million during the review period, from US$23,9 million during the comparable period in 2020.

Total income improved to US$76,7 million from US$52,9 million while operating expenses increased to US$46,3 million from US$35,9 million.

“The group also benefited from improved equity markets, with the market value of listed investments in Malawi and Zimbabwe increasing substantially in the first half of 2021.

“The capital adequacy and liquidity ratios of all group banks comfortably meet the prescribed prudential minimum ratios in their respective territories giving the group capacity to selectively grow its balance sheet,” the FMBcapital boss noted.

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