FBC Holdings Limited says it continues to absorb exchange losses emanating from the external US$10 million loan contracted from a regional lender pending registration process with the Reserve Bank of Zimbabwe (RBZ).
BY MISHMA CHAKANYUKA
In a trading update for the third quarter ended September 30, 2019, the group’s secretary, Tichaona Mabeza said pending finalisation of the registration process, FBC is still absorbing the exchange losses.
“The group is still in the process of registering with the Reserve Bank of Zimbabwe an external loan of US$10 million obtained by FBC Holdings Limited from a regional financial institution under the legacy debt,” he said.
“Pending finalisation of the registration process, the group continues to absorb the exchange losses arising therefrom. The exchange losses are expected to reverse upon conclusion of the registration process.”
Following the declaration of the Zimbabwe dollar as the sole legal tender through Statutory Instrument 142 in June, which effectively outlawed the use of the United States dollar and other external currencies, some companies have suffered exchange losses mainly arising from their foreign obligation.
RBZ has committed to assuming the foreign legacy debts at a rate of $1:US$1 to rescue companies.
There are, however, fears that the central bank will struggle to honour the commitment given that the country has been reeling from foreign currency challenges over a period of time.
During the period, FBC recorded a 275% increase in total net income to $388,6 million from $103,6 million posted in the same period last year.
The cost to income ratio improved to 51% compared to 55% recorded in the first half of the year driven by the strong income growth between the first six months and the third quarter of 2019.
Profit-before-tax increased by 533% to $189,4 million from $30 million reported in prior year.
Administrative expenses were up 74% to $152,9 million from $87,7 million incurred for the six months ended June 30, 2019.
Mabeza said total equity attributable to shareholders of the parent company increased by 29% to $349,1 million from a comparative 269,9 million.
He said the group would continue to introduce new customer experiences and focus on digitalisation programmes.
“During the course of 2019, the group embarked on an Oracle Core Banking and digital banking system upgrade as well as an Oracle super cluster hardware upgrade for FBC Bank and FBC Building Society,” Mabeza said.
“The investment brings with it a new digital banking experience in a secure and convenient environment. The group is, however, still stabilising the internet banking platform to maximise convenience to customers.”