Banking group FMBCapital Holdings says improved out-turn for the equities markets in Zimbabwe and Malawi boosted its interim results in 2021 after the market value of listed investments increased substantially.
The group is a Mauritius-based holding company of the FMBCapital Group, which is listed on the Malawi Stock Exchange and has banking and finance operations in five Southern African Development Community countries, namely Zimbabwe, Botswana, Malawi, Mozambique and Zambia.
“We also benefited from improved equity markets, with the market value of listed investments in Malawi and Zimbabwe increasing substantially in the first half of 2021,” the company said in a statement of the financials.
The year 2021 saw the Zimbabwe Stock Exchange (ZSE) mainstream index soar by 311 percent in nominal terms and over 200 percent in real terms.
The performance made the ZSE the best performing in the region and sub-Saharan Africa as a whole in real terms.
FMBcapital noted that the economic and social impact of Covid‐19 continues to be evident across all the territories in Southern Africa in which it operates.
“Amid the varying disruptions to operations, the group’s businesses have successfully sustained banking operations ensuring that customers can access banking services safely whilst also protecting our staff and partners,” it said.
It also said that political uncertainty impacted both Zambia and Mozambique operations during 2021 while the group also witnessed disruption in regional supply chains, foreign exchange supply and exchange rate volatility.
“However, our diversified business model proved resilient and with the continued support of our customers and staff, we maintained our profit after tax at June 2020 levels even after significant charges as required by IAS 29 in our Zimbabwe operations,” said the group.
For the period under review, the Group posted a profit after tax of US$13,1 million compared to US$14,3 million as at June 30, 2020 while before tax profits rose to US$22,5 million from US$19,9 million the same period last year.
Operating profit increased by 84 percent reflecting the underlying robustness of our banking operations.
However, the company noted that although its operation in Zimbabwe posted inflation adjusted profit in 1H2021, the country continues to face the challenge of hyperinflation.
“The prudential asset requirements which inhibit the bank’s ability to diversify into non‐monetary assets limits our options to manage this outcome more effectively,” it said.
The group’s Zimbabwe’s banking unit First Capital Bank (FCB) in an update for the quarter to September 30, 2021, said the business witnessed increased demand for both local and foreign currency loans due to increased economic activity.
Year to date operating income increased by $1,4 billion from the 2nd quarter to $3,7 billion and the growth was driven by both the increase in loans and transactional income.