FBC Holdings Ltd is sitting pretty in terms of capital and will meet the central bank’s statutory requirements, CE John Mushayavanhu said.
By Chris Muronzi
Mushayavanhu told analysts at a briefing in the capital on Wednesday his group was sitting on excess capital.
He said FBC Bank was capitalised to the tune of US$65 million as at December 2016 against the regulatory minimum of US$25 million for the same period while its building society was at US$41,3 million against US$20 million stipulated by the central bank.
The group’s reinsurance and insurance business is were also in full compliance with a capital position of US$13 million against requirements of US$1,5 million and US$6,5 million against a requirement of US$1,5 million.
He said FBCH, against such a background, was sitting on excess capital, a situation which has seen the group declaring a US$2 million dividend in FY16, bringing the total to date to US$3,5 million. This translates to a dividend yield of 6,5%, Mushayanhu said.
“We are adequately capitalised now hence we need to start giving back the money to our shareholders. And we feel the bank can easily trade itself to capitalisation,” Mushayavanhu said. “We feel that it might not be necessary to take capital of other strategic business units to comply with the Reserve Bank’s capital requirements.”
Under the central bank’s regulations, banks must be capitalised to the tune of US$100 million by 2020. Mushayavanhu said his bank’s loan book was clean after writing off US$8 million in the same period.
“We thoroughly cleaned up our lending book. After the presentation, I normally get questions on whether our book is really clean. It is,” he said.
The group’s non-performing loans stood at 4,3% against the RBZ’s 5%, Mushayavanhu said.
FBC has a loan book of US$202 million, a figure representing 5% of total loans and advances in the sector.
Mushayavanhu said his group would advance loans for productive purposes, but insisted they would be cautious in lending.
“We are going to increase our lending book, but we are not lending for consumption. We are going to lend to producers. For instance, when we have a manufacturer, who has exported his goods but needs funding, those are the transactions we are looking at,” Mushayavanhu said.
FBC’S profit after tax grew 21% to US$21,9 million in FY16.
Total income increased to US$93 million from US$81 million realised in FY15.
FBC Bank’s profit went up by 31% to US$12,2 million buoyed by a shift in financial transactions towards internet, mobile platforms and plastic money. The bank’s lending portfolio marginally declined 3% from US$208,9 million to US$202,3 million as it continues to pursue a cautious lending approach with asset quality being a key priority.
Non-performing loans are down to 4,34% as at December 2016 in compliance with RBZ guidelines,” Mushayavanhu said in a statement attached to the financial results.
FBC Building Society reported a net surplus of US$8,5 million, representing 35% growth from FY15. Total net income stood at US$15,6 million compared to US$12,9 million recorded in FY15.
FBC’s reinsurance business reported a 17% decline in gross premium income from US$17,8 million to US$14,8 million in FY16.