By Alois Vinga
LEADING financial services concern, First Capital Bank (FCA) has recorded strong Net- Interest Income (NII) growth which jumped 87% spurred by recovering broad economic fundamentals.
Presenting the group’s full year performance for the year 2021, FCA managing director, Ciaran McSharry said the group’s net income jumped to ZWL$2,418 million up from ZWL$1,291 million recorded during a comparative period in 2021.
In banking terms this kind of income is high quality considering that NII is financial performance which reflects the difference between the revenue generated from a bank’s interest-bearing assets and the expenses associated with paying on its interest-bearing liabilities.
Put simply, it is the excess revenue that is generated from the interest earned on assets over the interest paid out on deposits is the net interest income.
In comparison, Non-Funded Income just recorded a 33 % growth during the reporting period.
“The Bank recorded an increase in total income in real terms at 39%, to close the year on ZW$7.5b against ZW$5,4 billion in 2020. This was underpinned by a positive outturn in core business revenues, representing a strong quality of earnings and improved sustainability of operations,” said McSharry.
The bank acknowledged the positive economic policies impact which saw the tight fiscal and monetary policy with inflation retreating to 51,5% by end of the third quarter of 2021 from 106,6% at the end of the year’s first half.
FCA said as a result capacity utilisation estimated to have peaked at 61% with tepid growth in external sector performance – exports at 28% up from the 2021 first half levels amid growth in the mining sector which saw gold deliveries to Fidelity which reaching 19, 7 tons.
The top bank credited the modicum of exchange rate stability exhibited for the greater to the Reserve Bank of Zimbabwe foreign exchange auction impact for most part of the year.
“The tight monetary policy regime is expected to persist in the medium term in order to stem inflation in the wake of increased infrastructure and social spending by government.
Against this background, the Bank will exercise caution in its balance sheet expansion to ensure that a sufficient buffer is maintained on its capital and liquidity position in order to accommodate stress factors,” McSharry added.