HARARE - Financial institution FBC Holdings Limited, recorded an after tax profit of $14.8 million in the first half of the year ending June 30, 2018, an increase of 54 percent from the prior year over which an after-tax profit $9.6 million was achieved.
Group chief executive officer, John Mushayavanhu said the Group achieved a strong performance mainly driven by the increase in volume of business in the banking subsidiaries.
The bottomline growth was stimulated by a growth in revenue which was due in part to a sharp growth in non interest income. Revenue grew under an environment where challenges related to foreign currency and cash shortages have been covered up by the alternative growth in volume and value of transactions on the national payment systems, led by mobile and point of sale transactions in volume terms.
“The Group’s total revenues increased by 43 percent to $64.5 million compared to the same period last year ($45.0 million),” Mr Mushayavanhu said.
“This performance was mainly driven by the increase in volume of business in the banking subsidiaries.”
Net interest income increased by 19 percent to $31.0 million from $21.0 million recorded in the same period last year, thus constituting 31 percent of total income compared to $12.3 million and 27 percent respectively for the same period last year.
The reduction in demand for some traditional insurance products saw the insurance business register a 7 percent increase in premium revenues and a mere 1 percent increase in net earned insurance premium.
“The uptake of traditional insurance products has generally remained subdued due to prevailing structural weaknesses within the economy,” said Mr Mushayavanhu.
“The majority of the populace has remained uninsured due to low disposable incomes, with the current rate of insurance penetration estimated at 47 percent ahead of the estimated regional average of 3 percent.”
The introduction of IFRS 9 weighed on the Group’s impairment allowance of $7.2 million, a 100 percent increase from $3.6 million recorded in the prior period under the IAS 39.
The Group’s current financial position stands at $1.01 billion, which a 42 percent growth on the December 31, 2017 position of $712.4 million.
This increase was driven by a 54 percent increase in deposits from customers and borrowings.
However, gross profit on property sales decreased by 39 percent to $320.92 from $523.906 recorded during the same period last year.
Mr Mushayavanhu attributed this decline to the deliberate initiative taken by the Group to slow down on property sales to protect value in response to the assessment of the prevailing economic environment.
FBC Holdings Limited is an investment holding company listed on the Zimbabwe Stock Exchange and whose principal activities are in Zimbabwe. The Group offers diverse financial services through subsidiaries that span commercial banking, mortgage financing, short-term insurance, reinsurance, securities trading and micro-financing.
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