eBusiness Weekly
Fradreck Gorwe
Financial services provider, FBC Holdings Limited posted yet another commendable set of financials for the third quarter to September 30, 2019, capitalising on a solid half-year performance.
The improved performance was achieved despite constraining issues such as inflationary pressures and acute foreign currency shortages, which further eroded household incomes, savings and purchasing power.
Add negative parallel market forces to this, and a broadly weak economy threatened businesses’ sustainability during the period under review.
Notwithstanding the negative macro-economic environment, FBC maintained good momentum:
“The group continues to record positive performance, building on the good performance in the first half of the year,” said company secretary Tichaona Mabeza in a statement accompanying the trading update.
Total revenue for the third quarter to September 30, 2019 was up 96 percent to $388,6 million from $198,4 million posted in the half-year to June 30, 2019. The figure also represented a 276 percent increase from $103,6 million that was posted in the nine months to September 30, 2018.
Revenue lines were “comparatively higher than what was reported, both at interim and during the comparable period ended September 30, 2018”.
Growth in administrative expenses seldom tainted positivity in revenue performance since cost-to-income ratio improved to 51 percent compared to 55 percent for the half-year to June 30, 2019, more on the back of strong income growth between the first half of 2019 and the third quarter of the year. Administrative costs were up 74 percent to $152,9 million from $87,7 million posted in the half-year to June 30, 2019.
Due to higher turnover, profit before tax increased by 110 percent to $189,4 million from $90 million recorded for the six months to June 30, 2019. The figure also represented a 533 percent boost on prior year comparative of $30 million. Business units remained “profitable and ahead of their respective year to date performance targets”.
Statement of financial position as at September 30, 2019 was up 63 percent to $3,9 billion compared to $2,4 billion for the half-year, again representing 248 percent growth on $1,1 billion recorded as at December 31, 2018. This is testimony to enhanced activity in the quarter, more certainly an increase on assets, product improvement and introduction of new products.
During the course of 2019, the group upgraded an Oracle Core Banking and Digital banking system as well as an Oracle super cluster hardware for FBC Bank and FBC Building Society.
Total equity attributable to shareholders of the parent company increased by 29 percent to $349,1 million, compared to $269,9 million recorded as at June 30, 2019.
Meanwhile, 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. Exchange losses are expected to reverse upon conclusion of the registration process.
Going forward, the group expects to continue pursuing the digitalisation strategy as well as introducing new financial products.
“The group’s digitalisation programme also remains on course and the Group’s businesses will continue to introduce new customer experiences,” said Mabeza.
