VFEX listing will support growth, FCB

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First Capital Bank (FCB) says it is targeting to have completed the migration process to Victoria Falls Stock Exchange (VFEX) by end of the second quarter 2023 as the bank seeks to leverage on the USD-denominated stock exchange. FCB will become the first listed banking firm to de-list its shares from the Zimbabwe Stock Exchange (ZSE) followed by the subsequent listing on VFEX.

FCB managing director Mr Ciaran McSharry told at an analyst briefing for the year ended December 31, 2022 that there has been a general push for listing on VFEX which the bank could not resist to support its growth strategy.

“Looking from the past few months, there has been a number of major corporates shifting to VFEX.

“We are following that because we believe we want to maintain the course of VFEX for future opportunities.

“We will be the first bank there, and it will open our future and investment opportunities for us to invest into the Zimbabwe economy,” he said.

VFEX offers a number of incentives and trading advantages compared to the ZSE which has been the pulling factor for listings.

The USD-denominated exchange provides extended options for capital raising including debt listing in foreign currency.

Mr McSharry said it targeting to raise upwards of US$80 million credit lines from existing supporting banks and new ones.

“Last year we were dealing with the European Investment Bank, we are working with the AfreximBank and we are looking for more banks for credit lines for on lending to key sectors of the economy,” he said.

For the year under review, Mr Fanuel Kapanje, the finance director said despite the tough operating environment, the Bank was able to make a profit showing some level of resilience.

He said profit after tax was $8,4 billion compared to $11,6 billion in 2021 with the reduction as result of a number of things such as the lower outturn posted in the P and L on account of revaluation of our investment portfolio in 2022 compared to 2021.

“Looking at key elements of operations, we posted real growth in terms of net interest income of 37 percent and on non-interest income positive growth of 44 percent and that is explained by the macro-economic environment, particularly as that affected liquidity in the economy,” he said.

Mr Kapanje said the group witnessed an increase in operating expenses by 37 percent, with cash expenses in the number increasing by 49 percent.

According to Mr Kapanje, the bank realized $2,4 billion from fees and commission and this was a result of increased investment in digital transactions initiatives.

Mr Mcsharry said the bank has been growing its consumer lending business and increasing physical presence of banking operations in high-potential locations in the retail market.

“Current expansion initiatives include increasing the number of point-of-sale machines and host-to-host integration,” he said.

He added that the Bank is also onboarding a wider range of money transfer agents and will put additional billers on various platforms.

On the Kingdom Hotel joint venture, Mr McSharry said the bank is doing various assessments of the Hotel on what needs to be done.

“We will be soon floating international and domestic tenders to find suitable suitors for The Kingdom Hotel so that we move to bring closure to the transaction and realise the opportunities that lie in the tourism industry in Victoria Falls,” he said.

The property fell vacant following the exit of African Sun Limited (ASL) early this year, after operating for 26 years.

Mr McSharry said the Bank has to give the property a facelift before tenders are floated and is working with hospitality experts to come up with a facelift plan.