By Alois Vinga
ZIMBABWE Stock Exchange (ZSE) listed diverse financial services concerns, FBC Holdings has expressed optimism that the US$958 million injected into the economy by the International Monetary Fund (IMF) will aid toward attainment of projected inflationary reduction targets.
Government, in August 2021, received the funds from the IMF under the General Allocation of US$650 billion which benefited all IMF member countries in line with the long-term global needs for reserves, building confidence, fostering resilience and stability and supporting the post COVID-19 pandemic recovery.
Presenting the group’s performance for the period ended December 2021, FBC group chairman, Herbert Nkala expressed optimism that the fund will be a catalyst force for the government’s endeavor to arrest inflation.
“It is our expectation that the inclusion of US$958 million worth of SDRs in the budget to cater for social spending, will beef up foreign currency reserves and further contain inflationary pressures.
“Policy makers have indicated that inflation is projected to decelerate further in 2022, with estimates pointing to a month-on-month target rate of below 4% in the first quarter of the year and to average below 3% in the second half of 2022. Annual inflation rate is expected to ease to a range of 25-35%,” he said.
On the foreign exchange front , FBC said the Reserve Bank of Zimbabwe (RBZ) Auction System has managed to provide the much-needed liquidity to key productive sectors and thus contributing to the 7,8% economic growth recorded in 2021.
“To further buttress price stability, statutory instrument 127 of 2021 was gazetted to instill discipline in the foreign exchange market and safeguard adherence to prescribed policy guidelines,” said Nkala.
The policy directive imposes fines on individuals and businesses who fail to adhere to government’s policy on foreign exchange.
During the review period, the group achieved a solid financial performance, posting a profit before tax of $5 billion in inflation adjusted terms, 93% ahead of $2,6 billion recorded in 2020.
The Group benefited from improved performance by all business subsidiaries. Total income for the Group was up 37% to $17,9 billion primarily on the back of improved revenue growth across all income streams.
Net interest income increased by 86% to $ billion on the back of increased lending and an improved interest margin, while net fee and commission income was up 71% to $3,4 billion, aided by the group’s digitalised infrastructure that supported increased volume of transactions by customers.
