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First Capital secures additional US$15 million credit line

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By Alois Vinga


LEADING financial services provider, First Capital Bank has managed to secure an additional US$15 million from the African Development Bank (AfDB) which will go a long way in supporting key sectors of the economy.

Presenting a trading update for the first quarter of 2024 (FCB) company secretary, Sarudzayi Binha said the facility will spur economic growth.

 “To boost its capacity to support the expected economic rebound, the Bank has mobilised an additional US$15 million line of credit from the African Development Bank.

“This brings the total available facilities from various regional and international funders to US$48,5 million, significantly enhancing the Bank’s capacity to support growth in the key sectors of the economy and facilitate the anticipated economic rebound,” she said.

The efforts come at a time when several local manufacturers are desperately looking for cheaper financing sources to boost their businesses.

Binha said the operating environment presents risks and opportunities underscoring the bank remains positive about growth prospects in the medium term through diligently harnessing the opportunities whilst exercising robust risk and cost management.

Meanwhile, during the period, First Capital Bank (FCA) grew by 40%, to close at US$20,5 million from US$14,6 million for the same period in 2023 driven by strong performance in both net interest income and non-funded income.

The Bank accelerated lines of credit and interest income bolstered by a 15% increase in the loan book to US$91 million as of 31 March 2024 from US$79 million recorded as of 31 March 2023. Reflecting general market apprehension, total deposits increased marginally to US$132 million as of 31 March 2024.

Funding was thus augmented by recourse to lines of credit whose drawdowns increased from US$2,9 million to US$16,5 million between March 2023 and March 2024. Cost pressures remained elevated, with operating expenses rising by 12% to US$10,4 million in the first quarter of 2024 compared to the same period in 2023.

A rigorous rationalization and optimisation exercise is currently underway to curtail cost expansion. The Bank’s non-performing loan ratio (NPL) continued to improve quarter-on-quarter closing at 7% as of 31 March 2024 from 8% in December 2023 and 13% as of June 2023.

“The Bank remains positive about growth prospects in the medium-term through diligently harnessing the opportunities whilst exercising robust risk and cost management,”  added Binha.