First Capital Bank to focus on growing lending book

First Capital Bank Limited Zimbabwe will focus on aggressive lending going forward to grow its net interest income, its managing director Samuel Matsekete has said.

On Tuesday, the bank started operating under its dual brand name, First Capital Bank Limited in association with Barclays, to reflect the Mauritian-based FMB Capital Holdings majority shareholding in the local bank following a 42,7% acquisition of shares from United Kingdom-based banking group Barclays Plc.

"As a bank, you would have seen us historically having a higher weight of transactional income than interest earnings, and this was also reflective of our strategy then in terms of our lending. We then started to show a faster growth in our lending activities from around 2016, and we sustained that growth into 2017 and the 2018 first half," Matsekete told NewsDay on the sidelines of the official change of brand on Tuesday in Harare.

"What you saw over that period is an increase or the weight of net interest income starting to overtake or to outweigh the non-funded income. So really, what you would also see, when you compare us with the market, is a situation where the market, in respect of some of the players, was weightier in respect of interest income and having to build non-funded income. We were coming from the opposite. We were weightier in non-funded income and needed to build interest income."

Matsekete said the bank was seeking to exploit synergies from FMB's presence across in Botswana, Zambia, Mozambique and Malawi.

In its half year to June 30, 2018, the bank, posted an improved net interest income of $18,85 million, up 87,81% from $10,03 million over the same period last year.

However, for the period, non-interest income was down to $21,68 million from a 2017 comparative of $25,12 million.

The rise in net interest income was reflective of the rise in loans and advances to customers during the period.

Loans grew 26,05% to $143,12 million from a 2017 comparative of $113,54 million.

Most of the loans and advances in the period under review were heavily skewed towards personal and term loans that contributed $108,72 million, followed by overdrafts of $31,07 million and mortgages of $8,5 million.

FCB chairman Sydney Mtsambiwa said "over the next few months, and in terms of the Transitional Trademark Licence agreement signed with Barclays Plc, the bank will be cobranded with Barclays for the period to October 2020".

Other major shareholders include FCB's employee Trust with 15%, Barclays with 10%, while the remainder is held by more than 8 400 individual and institutional shareholders.