FBC Holdings Ltd, which posted a net profit of US$6,93 million in the six months to June 30 2012, has seen its balance sheet grow by a phenomenal 586% in US dollar terms since the adoption of multi currencies in January 2009 to US$346,3 million.
The group’s total assets grew by 128% from last year alone.
CEO John Mushayavanhu said the group’s strategy of maintaining a disciplined balance sheet by adhering to a conservative loan to deposits ratio (LDR) had seen the group report a 40% growth in after tax profit for the interim period to June. FBC Holdings is largely a diversified financial services group with interests in manufacturing.
In the half year to June 2012, the group reported a net profit of US$6,93 million from net interest income of $9,3 million and fees and commissions of US$11,28 million. Earnings per share were US1,06 cents.
FBC Bank issued US$156 million in loans in the period under review against deposits of US$204 million, bringing the LDR to 77%. However this has since come down to 75%.
Mushayavanhu said the group had to reverse a decision to pay a dividend following the Reserve Bank of Zimbabwe’s raising of minimum capital requirements to US$100 million.
The banking division made up 64% of the group’s total assets and contributed 44% of group pre-tax profit. Asbestos products manufacturer Turnall, the only non-financial division within the group, contributed 17%of group pre-tax profit and accounted for 20% of group assets. FBC Building Society brought in 25% of pre-tax profit and 16% of total income.
The bank was continuing its e-commerce drive as a way of reducing distribution costs “and to ensure that the products are affordable”. However, the challenge lay in using technology to reach the informal sector of the economy.
During the period under review, the bank obtained MasterCard acquirer status and launched Mobile Moola, a mobile phone-based money transfer system.
Plans were underway to launch Visa products over the next six months.
The bank had also refurbished some of its branches in the period under review while work was in progress at others. The bank opened a branch in Chitungwiza and another branch would be opened in Beitbridge upon completion of the Beitbridge Rainbow hotel.
Mushayavanhu said FBCH would only start capitalising its operations in 2013 in order to meet the US$100 million capitalisation requirements but negotiations for the merger of the bank and the building had already started.
He said if the group posted a profit of US$6 million in the second half and merge the bank and building society, it would close the year on capital of US$52 million, a figure above the US$25 million stipulation of the central bank’s phased plan.
The group plans to sell Turnall for US$20 million in 2013 and this would bring its capital at the end of the year to US$87 million. If the group makes a profit of US$15 million in 2014, its capital base at the end of 2014 would be at US$102 million.
The FBC CEO said Microplan, the group’s microfinance arm, was doing business in a way that minimised risk of diversion of funds. The strategy was to focus on deduct-at-source salary-based loans for reputable institutions/corporates and on low limits and structured arrangements.