- This was an 838% increase
- Total income more than doubled to ZWL854 billion
- Monetary gains shoot to ZWL9 billion
Harare- FBC Holdings Limited, a diversified group listed on the Zimbabwe Stock Exchange (ZSE), has achieved an impressive profit after tax (PAT) of ZWL366 billion for the half-year period ended June 30, 2023. This achievement showed the resilience of the group's diversified business model and its ability to adapt to the challenging economic conditions that prevailed during the period, including a tightened ZWL monetary stance that allowed for US Dollar transactions.
FBC Holdings operates in the banking, insurance, and property markets, which have all contributed to its overall success. The reported profit is the highest recorded since the reintroduction of the Zimbabwe dollar, both in terms of half-year performance and profit growth. This remarkable accomplishment was primarily driven by a significant increase in total income, surpassing expenses and making a substantial contribution to the overall growth of the group.
During the reviewed period, the group achieved a total income increase of ZWL854 billion, driven by its strong performance in transactional, investment, and hedging activities against operating costs of ZWL360.7 billion, which were partly influenced by inflationary trends and exchange rate fluctuations.
Net interest and related income remained steady at ZWL63.4 billion, indicating the consistent lending activities across all lending portfolios while loans and advances witnessed a remarkable growth of 228%, reaching ZWL1.5 trillion.
The group's innovation and digitalisation efforts have yielded positive results, with net transactional revenues amounting to ZWL56.9 billion for the half-year period.
“The Group continues to invest in digital platforms and channels to widen its product offering and enhance customer convenience in line with changes in the technological space. Automation and digitalization initiatives are being pursued to lower the cost to serve our customers,” the group’s chairperson, Herbert Nkala said in a statement.
During the period, the government introduced various measures aimed at taming down inflation which however, led to the tightening of the Zimbabwe dollar liquidity. In response, FBC Holdings conducted the majority of its transactions in foreign currency. Over 80% of the group's assets and core revenues were in denominated in foreign currency, a trend expected to continue until the end of the year.
This also resulted in monetary gains of ZWL9 billion was achieved from a monetary loss of ZWL38 billion in the comparative period.
FBC Holdings has maintained prudence in its provisions, setting aside an impairment allowance of ZWL76.2 billion during the review period. As of June 30, 2023, the group's statement of financial position stood at ZWL2.9 trillion, representing a remarkable growth of 180% compared to the position at the end of December 2022. Shareholders' funds also experienced significant improvement, increasing by 208% to ZWL621 billion from the previous position of ZWL201 billion.
As a result, the company has proposed an interim dividend of US$0.45 cents per share, payable at the end of September 2023.
“The board is committed to ensuring a fair dividend return to shareholders while preserving capital for future business growth opportunities.”
From the property side, the demand for properties in Zimbabwe remains strong, driven by both individuals and corporates seeking investment and hedging opportunities. Notably, there has been a surge in demand for residential properties, both for rental and purchase purposes, as companies relocate from the Central Business District.
FBC Holdings has completed 98 units under the Zvishavane Eastlea Project and currently has thirteen housing units under construction in the affluent suburb of Glen Lorne, Harare. The Kuwadzana Fontaine Ridge housing project property portfolio comprises 267 units.
Looking ahead, FBC Holdings acknowledges the measures implemented by the government and the Reserve Bank of Zimbabwe (RBZ) in the first half of the year, which have helped to curb inflation and address speculative pricing tendencies. The group expects that these policies will continue to address economic challenges and create an environment conducive to sustainable economic growth.
“FBC Holdings remains vigilant in monitoring the evolving operating environment and is well positioned to maintain its capital preservation and growth strategies, delivering long-term value to its shareholders.”
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