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Business Reporter
LISTED financial services group, FBC Holdings, is optimistic that Government’s economic policies will continue to yield price stability as well as restore a positive business sentiment.

Despite the uncertainties brought about by the Covid-19 pandemic, the group noted in its statement accompanying results for the six months period ended June 30, 2020, that there was hope in economic outlook beyond the immediate pressing challenges.

“The group is, however, hopeful that the current economic policies and measures being implemented, which have brought some price stability will further improve the economic environment going forward,” it said.

“The group will continue to seek opportunities to preserve its balance sheet and reconstitute its business model.”

FBC said its business model will be reconfigured to anchor survival in line with regulatory requirements and the changes to the macro-economic landscape.

During the period under review, the group continued to benefit from its diversified business model in addition to its strong risk management culture and early adoption of digitalisation.

As such, the group registered a commendable profit before tax of ZWL$2,1 billion from a loss position of ZWL$380,1 million for the same period last year. The positive performance was mainly driven by the non-funded income derived from its effective hedging strategy.

“The hedging strategy resulted in noteworthy exchange gains and fair value gains being recorded as the local currency depreciated against major currencies,” it said.

FBC Holdings recorded total income of ZWL$3,5 billion, which is 82 percent higher than the ZWL$1,9 billion recorded for the same period last year.

The level of total net income was, however, affected by the low contribution of net interest income as a result of the unsustainable low interest rate regime on local borrowings in a hyper-inflationary environment.

“Net interest income of ZWL$451,3 million was achieved, registering a growth of 20 percent compared to the same period last year,” said the group.

“Net fees and commission income decreased by 16 percent to ZWL$286,7 million from ZWL$340,7 million achieved for the same period last year mainly as a result of significant reductions in volume of transactions as customers transacted less as a result of the Covid-19 pandemic lockdown measures. This revenue stream is expected to improve as the lockdown measures are eased.”

FBC’s financial position as at June 30, 2020 increased by 29 percent to ZWL$20,9 billion from the December 31, 2019 position of ZWL$16,3 billion. The growth in the statement of financial position was mainly driven by a 31 percent increase in deposits riding on foreign currency denominated deposits and credit lines.

Total equity attributable to shareholders of the parent company increased by 69 percent to ZWL$4,4 billion from ZWL$2,6 billion as at December 31, 2019 as a result of retained revenue reserves for the period.