First Capital Bank’s Foreign Currency Deposits Hit US$63m





FIRST Capital Bank (FCB) has seen its foreign currency deposits reaching US$63 million during the third quarter period indicating the public’s increasing confidence to bank their foreign currency amid stability measures being implemented by the government.

In June this year, the Reserve Bank of Zimbabwe (RBZ) abandoned the interbank foreign exchange system in favour of the auction system, which has led to the stability of the country’s foreign currency exchange market by bringing about stability.

The government has also allowed the use of free funds in settling domestic transactions and the developments alongside other measures are slowly beginning to restore public confidence in the country’s banking system.

“Foreign currency deposits slightly increased by 3% from US$61m to US$63m whilst foreign currency loans were reduced significantly due to repayments. Looking ahead, the bank will most likely surpass the third quarter performance given the growth in deposits,” FCB company secretary, Violet Mutandwa said.

During the period under review, the bank also registered balance sheet growth driven by local currency deposits which grew by 73% from $1.5 billion to $2.6 billion.

As a result, loans increased by 83% from $779 million to $1.43 billion.

The bank registered a strong performance during the third quarter with total income in inflation adjusted terms excluding property revaluation increasing by 58% from $1.2 billion to $1.9billion.

The bank also negotiated loans due to Covid-19 constraints and constitute 6% of the loan book being the same level as last the quarter with the tourism sector constituting the largest proportion.

There was, however, no deterioration in credit quality of these renegotiated loans in the third quarter with the non-performing loans ratio remaining stable at 0.2%, well below the market average and the bank’s deposits continuing to be well diversified.

“The easing of lockdown towards the end of the second quarter enabled various sectors of the economy to start operating normally, resulting in increased transaction volumes,” added Mutandwa.