FIRST Capital Bank Zimbabwe (FCB) will take a cautious approach to balance sheet expansion in the current financial year, ensuring it maintains adequate capital and liquidity buffers to withstand potential economic stresses.
Since the introduction of the Zimbabwe Gold currency in April 2024, the Reserve Bank of Zimbabwe has enforced a strict monetary policy, significantly limiting market liquidity to prevent excessive money supply from weakening the domestic currency.
In a statement accompanying the bank's financial year results for the period ended December 31, 2024, FCB said the tight monetary policy regime is expected to persist in the medium term as the government increases infrastructure and social spending in an effort to contain inflation.
“In this context, the bank will adopt a cautious approach to balance sheet expansion, ensuring that adequate capital and liquidity buffers are maintained to withstand potential stress factors,” it said.
“Asset quality will remain a key area of focus, while the bank will also seek opportunities to support and participate in the stimulation of activity within the economy’s growth sectors.”
The focus on the balance sheet comes as the bank recorded a decline in profit after tax for the period under review to US$21,96 million, from a prior year comparative of US$29,73 million.
The decline was attributed to a 10,23% increase in operating expenses to US$46,79 million during the period under review from the prior year comparative.
“With capital levels well above regulatory requirements, core capital grew 19% to US$61 million, maintaining a strong buffer above the US$30 million regulatory minimum,” FCB chairman Patrick Devenish said.
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“Capital adequacy stood at 29%, while a liquid assets ratio of 53% ensured the bank remains well-positioned to support asset growth.”
Total assets were up nearly 25% to US$295,8 million at the end of the financial period under review, driven by loan portfolio.
“Loan portfolio grew by 31% in 2024, supporting key sectors including manufacturing, mining, tourism, and agriculture.
“The bank continued to expand the lines of credit, which now total US$50 million,” FCB chief executive officer Tapera Mushoriwa said.
He said total deposits increased by 45% to US$178,4 million in 2024, reaffirming market confidence in the brand and solution offering.
“The operating landscape and rebounding gross domestic product will continue to present opportunities and risks. The business realignment has configured the bank to continue to harness the opportunities presented whilst managing the risks,” Mushoriwa said.
“The bank will focus on investing in the brand, solutions and service for clients, people development and technology all under the ambit of continuous strengthening of governance and risk frameworks to ensure long-term financial stability and investor returns.”
