Consilium Investment has stake in FBC

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A United States investment management firm Consilium Investment Management has acquired a stake in local banking group FBC Holdings.

Staff Writer

The company recently bought around 4% of the the banking group’s total issued share capital sourced from various sellers. FBC is considered one of the most stable banking stocks on the Zimbabwe Stock Exchange.

The stake is currently housed under custodians.

FBC is currently trading at 7.8US cents and has a marginal year to date gain of 4% based on yesterday’s trading price.

Consilium is a minority employee-owned Global Emerging Markets investment management firm based in the US. It is the same firm which extended long-term debt to Zimbabwe-focused company Cambria (formerly LonZim).

Well-placed sources say the firm still has appetite for more shares in the group while there are other foreign firms like Equator Inv. who are keen on getting a sizeable stake in the company.
FBC’s major shareholder is National Social Security Authority with a 26,26% stake.

The group’s total income in the year to December 2012, registered a 19% growth over last year buoyed by strong performance in the banking and insurance subsidiaries.

Net interest income contributed 27% as opposed to 22% in 2011, a development pointing to increased lending activities.

In its insurance business, claims and commissions went up by 69% but it is also in line with the increase in the gross premium return for the insurance business.

Expenses went up 20% from US$37,5 million to US$44,9 million.
Profit before tax (PBT) for the group increased by 8% to US$16,9 million with the group, saying it could have been much better had it not been weighed down heavily by subdued performance at Turnall.
PBT was also burdened by higher overheads, incurred mainly to enhance the group’s competitiveness through implementing technology driven business solutions (e-commerce).

Profit after tax increased by 25% to US$15,6 million ahead of PBT growth because the building society is not taxed.

Earnings per share were 2,42 US cents up from 1,78 US cents.
The group said it would prioritise liquidity, adding: “We don’t want to be found wanting when depositors want their money.”

Lending will be against security even from the so-called blue chip companies and e-commerce will be at the centre of transaction banking, the company said.

Analysts say for investors looking for exposure in banking, FBC is a compelling investment case. With impressive 2011 and 2012 performance, the group is expected to perform strongly in 2013 driven by the performance of its mortgage business.

They say the model of the building society is arguably the most profitable as it is selling units for a profit and goes on to tie the buyer in a 10 year mortgage at interest rates around 10%.

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