FBCH appoints US exec as director

HARARE - FBC Holdings Limited (FBCH) has appointed American company ShoreCap II Limited (ShoreCap)’s executive Franklin Kennedy as director.

This comes as ShoreCap — specialising in small business banks and microfinance institutions — acquired a 7,3 percent stake in the Zimbabwe Stock Exchange-listed financial group last year after injecting nearly $5 million as part of a deal to recapitalise FBCH’s micro-finance unit.

Franklin, a Canadian citizen resident in the US, is currently president of Equator Capital Partners, Chicago, Illinois USA and also sits on the boards of numerous multi-national institutions.

His appointment is with effect from December 18, 2013.

FBCH’s chairperson Herbert Nkala said Franklin was appointed director based on his “technical expertise, vast business experience and contacts”.

“Franklin brings with him a wealth of experience in the financial services sector and I am confident that his appointment will add a new dimension to our board deliberations,” he said.

Meanwhile, FBCH group chief executive John Mushayavanhu said the group’s lending was 10 percent down in the five months to May this year compared to the December 31, 2013 figures.

“We decided to slow down on lending at the beginning of the year and focus on collections to curb Non-Performing Loans (NPLs). This has yielded results as our NPLs are below 10 percent which is a commendable turnout in a market which has an average of 16 percent in NPLs,” he said.

Mushayavanhu noted that the remaining NPLs were secured with the value still maintained.
“We will be resuming lending cautiously in the near future on the back of accessed credit lines,” he said.

In the period under review the bank continued to be the flagship business with an increased contribution to the group’s profit before tax of 54 percent compared to 44 percent as at December 31, 2013 in a market that is continuously facing liquidity challenges.

He said Turnall performance since last year was below budget because the first quarter and second quarter orders were down.

Mushayavanhu said a half-year loss was expected from Turnall, but would pick up by year end.

“We changed the business model for Turnall from a credit sale approach to a cash sale approach. As such customers were put on a cash upfront basis,” he said.

“Initially there was resistance in the market to accept this new business model and therefore sales volumes suffered in the first quarter. However, volumes have picked up as most customers have since run down their stock levels.”

Mushayavanhu noted that in the five-month period 59 housing units were developed and the bulk of the houses have been sold.

The units include 18 from Masotsha Ndlovu and 41 from Glaudina. He said 30 garden flats were being constructed in Newlands and 10 cluster homes in Greendale.

He said deposits and lines of credit have increased by six percent.

Mushayavanhu said the performance of the building society was ahead of last year and the loan book grew because of mortgages as they were secured. NPLs for the building society stood at six percent.

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