- Significant NPL Reduction: Dropped from 7% in Q1 2024 to 3.66% in Q1 2025
- Robust Growth in Financial Metrics: Loan book surged by 187% while total income increased by 118%
- Strong Liquidity and Capital Position: Maintained liquidity ratios above regulatory thresholds, with an asset base growth of 14%
NPLs in % in Q1
Harare- First Capital Bank, Zimbabwe’s renowned financial services outfit, has achieved a remarkable feat in the first quarter of 2025, with non-performing loans (NPLs) plummeting from 7% in Q1 2024 to 3.66% in Q1 2025.
This drastic decline is a powerful indicator of the bank’s enhanced credit risk management and the strengthening of its loan portfolio.
A lower NPL ratio signifies that fewer loans are defaulting, reducing the necessity for substantial provisions and write-offs.
This, in turn, safeguards the bank’s earnings and fortifies its capital base, paving the way for improved profitability and greater financial stability.
In Zimbabwe’s volatile economic landscape, where high NPLs have historically plagued financial institutions, this improvement positions First Capital as a standout performer, reflecting its proactive approach to managing credit quality.
The significance of this NPL reduction extends beyond mere numbers, it directly impacts the bank’s operational efficiency and market perception. By minimising loan defaults, First Capital can allocate more resources toward growth initiatives rather than tying up capital in provisions for bad debts.
This healthier loan portfolio not only boosts investor and customer confidence but also provides the bank with a competitive edge in a sector where credit risk remains a critical challenge.
As the bank continues to refine its risk management strategies, the decline in NPLs serves as a foundation for sustained profitability and long-term stability, making it an attractive player in Zimbabwe’s banking industry.
Beyond the NPL success story, the Bank’s overall performance in Q1 2025 paints a picture of robust growth and operational strength.
The bank’s loan book surged by ZiG3.3 billion, marking an extraordinary 187% increase year-on-year, while deposits grew to ZiG4.1 billion, up 132% from Q1 2024. This expansion reflects strong customer trust and effective business strategies, enabling the bank to capture a larger share of the market. T
otal income also soared to ZiG540.7 million, a 118% rise from the comparable period in 2024.
When viewed in US dollar terms, a critical measure given Zimbabwe’s currency fluctuations, total income reached $20.5 million, up 12%, with loans growing to $122.7 million (a 46% increase) and deposits rising to $153.9 million (an 18% increase).
Liquidity and capital strength further bolster First Capital Bank’s standing. The bank maintained liquidity ratios well above regulatory thresholds, with liquidity at ZiG803 million and above 30%, signaling its capacity to meet short-term obligations and weather potential market shocks.
Its asset base expanded by 14% compared to Q1 2024, driven primarily by the loan book surge, while regulatory capital grew by 8%, reinforcing a solid financial foundation.
These figures not only highlight the bank’s ability to underwrite new business but also its preparedness to navigate Zimbabwe’s unpredictable economic environment. Compared to peers, First Capital Bank’s liquidity and capital ratios suggest a stronger buffer against risks, an advantage in a sector where liquidity constraints have occasionally hampered competitors.
Looking forward, First Capital anticipates a cautious economic outlook for the remainder of 2025, shaped by global political uncertainties and shifting donor funding dynamics.
However, optimism prevails due to a favourable agricultural season and soaring gold prices, both of which are expected to stimulate economic activity in subsequent quarters.
These factors could drive demand for banking services, particularly loans, benefiting institutions like First Capital Bank that are well-positioned to capitalize on such opportunities.
The bank’s commitment to leveraging these emerging prospects while reinforcing governance and risk management frameworks reflects a strategic, forward-thinking approach.
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