FBCH records $18,1m profit

HARARE - Financial services group FBC Holdings (FBCH) profit for the year to December 31, 2015 surged 269 percent to $18,1 million from $4,9 million on the back of growth in net interest income and insurance premium.

FBCH chief executive John Mushayavanhu told an analysts’ briefing in the capital yesterday that the group’s total income rose six percent to $82 million from $77,4 million recorded prior period driven by growth in net interest income.

“Profit before tax went up 24,6 percent to $21,3 million from $17,1 million,” he said.

Net interest income increased 12 percent to $36,6 million from $32,8 million. However, the FBCH boss noted that total deposits were down 1,2 percent to $365 million from $361 million recorded during the same period last year.

Impairment dropped 60,2 percent to $3,3 million from $8,3 million as the group’s insurance premium revenue rose 13,8 percent.

In the period under review, the group’s earnings per share reached a peak of $2,72 since dollarisation in 2009.

Mushayavanhu noted that the group which declared a dividend of $0,29 per share for the period under review, has paid out about $10,4 million to shareholders — 22 percent of the company value  in the past five years.

Mushayavanhu also said FBCH had reduced its Non-Performing Loans (NPLs) ratio to 7,9 percent at the end of the period under review from 17,2 percent recorded prior comparable period.

“During the year, debt sales amounting to $8 million were transferred to the Zimbabwe Asset Management Company (Zamco)” he said.

However, the chief executive told analysts that the central bank owned special purpose vehicle had come as a last resort because under Zamco, the central bank-issued Treasury Bills are long dated at a five percent interest rate which is “unsustainable”.

“Our shareholders even said we should get back the NPLs. Had we proceeded by mitigation, by now, we would have recovered the debt as the accounts we handed over are viable... Going forward, I don’t know what will have happened for us to pass on our NPLs to Zamco,” he said.

The FBCH boss said the diversified financial services group was looking at an intensive recollection programme expected to lead to a further five percent reduction in NPLs this year.

During the period under review, the building society contributed 28 percent to group profit and recorded an NPL ratio of eight percent.

The group’s microfinance unit, MicroPlan — with a loan book of over $20 million — had an NPL ratio of seven percent and contributed 30 percent to group profit.

FBC Reinsurance contributed 11 percent to group profit as the medical insurance division Eagle contributed seven percent to group profit.

“Conclusively, from these figures we can say the group has a market share of about seven percent… in a market were the ideal is a five percent market share,” Mushayavanhu said, adding that the group was mulling converting MicroPlan into a deposit taking microfinance institution given that it is already adequately capitalised to take deposits.

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