New Zimbabwe.com

FBC Holdings Limited posts US$8m profit

FBC HOLDINGS Limited last week reported revealed that profits reached US$8,3 million after tax over the half year ending June 30 compared to about US$7 million for the corresponding period last year.
This improvement was driven by increased revenues from group operations as well as costs containment.
Group CEO John Mushayavanhu said the group’s earnings capacity continues to be buttressed by its diversified business model, with all results from all subsidiaries except the manufacturing business significantly higher than for the corresponding period last year.
“The group’s total recorded an increase of US$0,1 million to US$36,8 million from US$36,7 million,” Mushayavanhu said.
“The increase was weighted down by the mandatory reduction of bank charges and interest margins as stipulated in the memorandum of Understanding (MoU) signed between the banking industry and the Reserve Bank of Zimbabwe.
“In addition, the subdued performance of the manufacturing business also weighed down revenues”.
He added that total income was expected to increase in the second half of the year from increased volumes while the recently introduced concrete tile business would also perform better.
Net interest income registered a modest growth of five percent of US$9,9 million contributing 27 percent of the group’s total income compared to the same period last year.
Meanwhile, the unavailability of adequate credit lines for the country continues to push up the cost of funding as financial institutions compete to attract the limited deposits resulting in a negative impact on margins against a backdrop of a mandatory interest rate capping.
But despite the capping of bank charges to customers, fee and commission income increased by two percent to US$11,5 million as a result of increased volume of transactions.
The group’s insurance premiums increased by 12 percent to US$12,1 million in line with increased business.
Net earned insurance premium, however decreased by six percent to US$7,2 million as the insurance businesses reviewed their risk transfer model by retaining less premium in order to improve the quality of cover to customers.
The contribution of net earned insurance premium to group total income at 20 percent was in line with the same period last year while total impairment charges at US$10,2 million is considered adequate in view of the security being held by the banking subsidiaries.Advertisement

The group’s cost-to-income ratio improved to 73% from 75% compared to the corresponding period last year as a result of improved cost containment. Operating expenses registered an increase of 2,8 percent to US$21,7 million compared to the same period last year.