FBC income up 42 percent

Herbert Nkala

FBC Holdings Limited registered a 42 percent growth in the group’s financial position to $1,01 billion in the six months ended 30 June 2018 from $712,4 million recorded in December last year.

The group achieved a strong performance during the period under review, with a profit before tax of $18,8 million and a profit after tax of $14,8 million, on total revenues of 64,5 million and an annualised return on equity of 19 percent.

Profit before tax increased by 58 percent compared to the same period last year, while profit after tax for the period increased by 54 percent. Net interest income for the diversified financial services group also increased by 19 percent to $31 million, constituting 48 percent of total income compared to $21 million and 47 percent respectively for the same period last year.

Chairman Mr Herbert Nkala said yesterday in a statement accompanying the group’s unaudited financial results for the half-year period that this performance was attributable to the increase in the volume of business in the banking subsidiaries. The unit saw a 54 percent increase in deposits from customers and borrowings.

“The increase is as a result of the significant progress made towards the containment of the group’s cost of funds and a growth in interest earning assets underpinned by increased deposits,” said Mr Nkala.

He said during the period, the group managed to draw down on a $90 million structured loan facility from Africa Export Import Bank (Afreximbank) in May 2018, with improved terms and conditions, a successor facility to the $60 million syndicated facility that was repaid in July 2017.

Mr Nkala also said the total equity attributable to shareholders of the parent company increased by six percent compared to the position of $144 million recorded in December last year driven by retained earnings. During the period, the group’s cost to income ratio decreased to 71 percent from 74 percent compared to the same period last year primarily as a result of increased income and cost containment measures.

Mr Nkala also said an impairment allowance of 7,2 million was recorded, reflecting a significant increase from the 3,6 million recorded during the corresponding period last year.

“The increase has been necessitated by the need to comply with the International Financial Reporting Standards (IFRS) effective from the beginning of the year,” he said.

After taking into account the performance of the group and the need to continue strengthening the group’s capital position, the banking group proposed an interim dividend of 0.2976 cents per share. According to Mr Nkala, the interim dividend amounting to $2 million is 33 percent above the comparable period last year and translates to approximately seven times over.

The group anticipates that policy reforms, robust monetary policy interventions and the restoration of investor and creditor confidence in the country’s economy in the post election period will be fundamental to the future performance of the business, the industry and the economy in general.

“FBCH is well positioned to continue generating sustainable returns and enhancing shareholder value supported by its diversified business model,” said Mr Nkala