FBCH Holdings Limited’s profits for the year ended December 31, 2015 grew 270 percent in an outstanding performance to $18,1 million from $4,9 million recorded in 2014, driven by a diversified business model, which saw the group divest from Turnall Holdings, pushing its net income up 5,9 percent.
Turnall Holdings Limited, a non-core building supplies manufacturing company, had been part of FBH Holdings from September 2009 and was disposed in 2014.
The group has declared a $2 million dividend for the period in what chairman, Herbert Nkala, yesterday described as “another outstanding year” for FBCH in his audited financial statement for the period.
Despite the difficult economic environment, the group’s total net income grew 5,9 percent to $81,9 million underpinned by growth in interest income of 12 percent ($3,8 million) to $36,6 million, fee and commission income of $20,8 million, growth in net insurance premium of 15 percent ($2,9 million) to $22,1 million.
Nkala said growth in net interest income was driven by a five percent growth in financial assets held to maturity and the loan book of $353 million from $337 million, improved cost of funding and the continued re-focusing of the loan portfolio to better yielding sectors and improved quality loan income.
FBC Bank recorded a profit before tax of $9,3 million from $2,2 million after a fair value adjustment of $6 million on the disposal of Turnall.
The bank’s core capital stood at $43 million, well above the prescribed Reserve Bank of Zimbabwe minimum threshold of $25 million.
During the period FBC Building Society recorded a surplus of $6,3 million with its financial position gaining 14 percent to $124 million from $109 million in 2014.
The group also runs Microplan Financial Services, FBC Reinsurance and Eagle Insurance, which also performed well while FBC Securities faltered as investors became more risk-averse on the Zimbabwe Stock Exchange.
Gross profit on property sales also dropped to $0,9 million compared to $2,9 million in 2014 due to slow down in sales.
The building society had 22 units of unsold houses at year end as most of these were only completed towards the end of the year.
“The group’s diversified business model in the financial services sector continues to form the foundation of our strong performance, and positions the FBCH Group well in dealing with a volatile micro-economic landscape,” said Nkala.
“We’ll continue to monitor global and local economic developments, and realign our strategies as appropriate, with the view to continue driving shareholder value.”
The group has said it will not volunteer additional non-performing loans to the central bank’s sector cleansing company, ZAMCO, as it can do better to recover its money.
This comes as FBC is looking to manage NPLs more tightly with a target to cut the rate of bad loans to below five percent by year end from the current 7, 96 percent.