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Oliver Kazunga Senior Business Reporter
FBC Holdings’ profit for the year ended December 31 2014, went down to $4,8 million after a book loss of $9 million following the weaning of building materials producer, Turnall, last year.In the third quarter of 2014, the group offloaded its 58.3 percent shareholding in Turnall Holdings Limited by way of dividend specie to allow compliance with the Reserve Bank of Zimbabwe requirements.

Section 34 of the Bank Act (Chapter 24:20) prohibits banks from continuously holding shares in a company that engages in any business outside banking operations.

The group achieved a profit before tax of $8 million for the year ended December 31, 2014, despite Turnall’s disposal, group chief executive officer John Mushayavanhu said on Tuesday in a statement accompanying FBC Holdings’ audited financial results.

“Despite the disposal of Turnall as a dividend in specie at a book loss of $9 million, the group sustained a positive performance with profit before tax of $8 million for the year.

“The performance is, however, significantly less than the profit of $14 million achieved last year mainly due to the aforementioned book loss of $9 million and the significantly increased impairment allowance made in response to the heightened inherent credit risk outlook and the challenging macro credit environment,” said Mushayavanhu.

With the group now focusing on core business, its total net income jumped eight percent to $77 million from $71 million achieved last year.

Mushayavanhu said the revenue was buoyed  by increased customer acquisitions underpinned  by the continued collaterisation of the FBC   brand.

The group’s net interest income for the period under review also went up by 14 percent to $29 million from $25 million recorded last year.

Its contribution to total net income increased to 37 percent from 35 percent in the prior year.

“This was driven by growth in loans and advances and mortgages on the back of increased deposits and increased credit lines,” he said.

Mushayavanhu said the contribution of gross  profit on property sales decreased to four percent  from five percent mainly as a result of reduced  turnover on property sales as a significant number of housing units were completed towards the tail end of the year.

“It’s however, encouraging to note that margins on property sales improved to 36 percent from 31 percent last year as a result of increased efficiencies in the construction of housing units,” he said.

The group, Mushayavanhu added, continues to place emphasis on cost containment as a strategic objective for survival under the current challenging operating environment.

“The group cost income ratio moved to 78 percent from 74 percent last year mainly due to an increased impairment allowance made as a response to the heightened credit risk outlook. Administrative overheads at $40 million were three percent above those incurred last year as a result of expansion related expenses,” he said.