First Capital Bank records growth in forex deposits

HARARE – The increasing use of foreign currency in local transactions saw First Capital Bank Zimbabwe record a 10 percent increase in foreign currency deposits, acting MD Ciaran McSharry told the annual general meeting AGM held Thursday last week.

With businesses now compelled to use a dual pricing system that accepts the use of forex for payment of local goods and services, banks are likely to see an increase in foreign currency deposits as recorded by First Capital Bank.

Market players including the Confederation of Zimbabwe Industries have, in a recent research paper, noted the widespread use of the US dollar for transactions in the economy with the Government itself also now paying its workers US dollar allowances, while collecting some levies, taxes, and fees in foreign currency.

However, deposits in local currency are also growing at a much faster pace with RTGS deposits for the bank increasing by about 70 percent to $1,5 billion.

With a growing deposit base, the bank has increased loans and advances with the loan book growing by 24 percent during the period under review.

Going forward Mr. McSharry said the bank will focus on growing its digital base, making sure that customers can transact and reduce client-flow into the branch network.

The coronavirus (Covid-19) increased the drive towards digitisation of banking and First Capital has seen an increase in the utilisation of digital platforms.

“We also look to increase our US dollar balance sheet and income through increased loan offerings and transactional income on the Nostro (FCA) accounts that we have with our clients,” Mr. McSharry added.