BY TATIRA ZWINOIRA
FINANCIAL services firm, FBC Holdings Limited (FHL) says preliminary assessments show that the group’s financial performance for the year 2020 may be impacted adversely.
In its trading update for the first quarter of the year ended March 31, 2020, FHL company secretary Tichaona Mabeza said the group was reviewing all its business segments with a view to establishing the impact of the COVID-19 pandemic.
“While there are still a number of unknown variables, preliminary assessments show that the group’s financial performance for the year 2020 may be impacted adversely. Product and services demand is projected to decrease, while impairment costs will likely increase as revenue streams of our customers are impacted,” he
“Group operations on the other hand have adapted to the new order and this includes offering of services and products using our digital platforms. This will ensure that our customers continue to access our services with minimal disruption.”
Added Mabeza: “The group will remodel and realign business structures in view of the need to ensure the safety of all stakeholders while at the same time ensuring the viability of all business units”.
As a result of the COVID-19 pandemic, FHL has activated its “Business Continuity Management” processes to mitigate against the coronavirus-induced challenges.
These arrangements require 50% of staff members to work from home while the other staffers work on-site at the FHL premises to attend to business activities which require a physical presence.
In addition, management and board meetings are being conducted using virtual platforms to enable the provision of governance and business oversight.
Most key services required by customers are available on online and digital platforms.
Mabeza said while the group projects a possible adverse financial impact given the COVID-19 pandemic, it resolved to remain solvent.
“This is based on an internal capital adequacy assessment which confirmed the ability of the business to absorb the possible financial impact of COVID-19 without threatening the solvency status of the institution. The group is confident that the necessary tools and strategies will be deployed to remodel the business in line with the new operating environment,” he said.
Despite the impact of COVID-19, during the period under review, total net income for the group on a comparative basis grew by 88% from $337,3 million to $635,3 million, largely supported by a growth in net trading income.
However, administrative expenses on a year-on-year basis were up 31% to $249,7 million, driven mainly by market-wide pricing distortions.
“The group cost-to-income ratio for the period improved to 42% from 64%. Group profit before tax of $336 million and after tax profit of $135,7 million was achieved for the quarter ended March 31, 2020. The group’s statement of financial position as at March 31, 2020 remained unchanged at $9.1 billion. Total equity attributable to shareholders of the parent company increased by 7% to $1,6 billion, compared to the position of $1,5 billion recorded as at December 31, 2019.”
Do you have a coronavirus story? You can email us on: firstname.lastname@example.org