TOTAL income at the Victoria Falls Stock Exchange-listed First Capital Bank grew by 40% to US$20,5 million in the first quarter of this year compared to the prior period, driven by strong performance in net interest and non-funded income streams.

The income was before once-off fair value adjustments.

“Cost pressures remained elevated, with operating expenses rising by 12% to US$10,4 million in the first quarter of 2024 compared to the same period in 2023. A rigorous rationalisation and optimisation exercise is currently underway to curtail cost expansion,” the bank said in a trading update for the first quarter.

In the review period, the bank accelerated lines of credit and interest income was bolstered by a 15% increase in the loan book to US$91 million.

Reflecting general market apprehension, total deposits increased marginally to US$132 million.

Funding was augmented by recourse to lines of credit whose drawdowns increased from US$2,9 million to US$16,5 million.

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The bank’s non-performing loan ratio continued to improve quarter-on-quarter closing at 7% from 8% in December 2023 and 13% as at June 2023, following various interventions undertaken and underway such as sectoral redistribution to improve overall asset quality, the bank said.

The bank’s capital increased by 25% during the quarter, with the capital adequacy ratio at 35%, well above the regulatory threshold of 12%.

At US$58,2 million, core capital remained comfortably above the regulatory absolute threshold of US$30 million, and liquidity ratios remained above the minimum regulatory requirement of 30% throughout the period under reporting, it said.

“The operating environment presents risks and opportunities. The bank remains positive about growth prospects in the medium to boost its capacity to support the opportunities while exercising robust risk and cost management,” the bank noted.

“To boost its capacity to support the expected economic rebound, the bank has mobilised an additional US$15 million line of credit from the African Development Bank.”

This brought the total available facilities from various regional and international funders to US$48,5 million, significantly enhancing the bank’s capacity to support growth in the key sectors of the economy and facilitate the anticipated economic rebound, the bank said.