FBC Holdings Limited – Total income up 212% to ZWL43.2 bn, proposes dividend of 148.82 ZWL cents per share in HY22

By Published On: August 31st, 2022Categories: Corporate announcement, Earnings


I am pleased to present to you the Group’s reviewed interim financial statements for the six months ended 30 June 2022.

Inflation Adjusted Financial Performance Review

Fbc Holdings Limited 2022 Interim Results For The Half Year

FBC Holdings Limited (FBC.zw) HY2022 Interim Report

FBC Holdings Limited achieved a profit before tax of ZWL12.2 billion and an after tax profit of ZWL8.1 billion which is a testimony to the Group’s adaptation, resilience and tenacity in a volatile operating environment.

FBC Holding’s profitability was achieved on the back of a 212% improvement in total income to ZWL43.2 billion, 68% of this amount was in favour of the Group’s hedging and investment strategies and 32% was derived from core business revenue lines.

Net interest and related income improved by 89% to ZWL7.3 billion, leveraging on the Group’s higher foreign currency lending portfolio proportion. Loans and advances totalling ZWL68.8 billion improved by 34%, compared to the audited position as at 31 December 2021.

Net fee and commission income registered a growth of 44% to ZWL4.7 billion, largely emanating from the Group’s digital thrust which has positively impacted our payments and processing systems. Plans are underway to deploy a sizeable number of Point Of Sale (POS) machines in the market, to increase customer acquisition, convenience and transaction volumes for the Group.

The Group’s net earned insurance premium of ZWL1.9 billion increased by a marginal 5% compared with the prior year, reflecting subdued consumer capacity in the face of declining disposable incomes. The use of multi-currencies in the economy has provided an opportunity for the Group’s insurance subsidiaries to increase underwriting in foreign currency.

Other income, which mainly comprises exchange rate gains on the Group’s net foreign currency holding position, gains on the stock market portfolios held by the non-banking businesses and fair value gains on investment properties, amounted to ZWL29.3 billion for the period under review, which is an increase of 520% compared with the prior period.

The Group’s overall cost income ratio, excluding monetary loss, improved to 53% from 61% recorded for the same period last year, benefiting from a higher increase in total income of 212% compared to 172% for expenses. Administration expenses increased by 191% to ZWL20.1 billion, mainly due to forward pricing premiums in a hyperinflationary environment. Impairment allowance increased by 201% to ZWL1.5 billion in line with the expected difficulties in the operating environment. Monetary loss increased by 311% mainly due to the growth in net monetary position of the Group.

The Group’s total assets as at 30 June 2022 was at ZWL186.2 billion, representing a 34% increase on the 31 December 2021 inflation adjusted figure of ZWL138.6 billion. Balance sheet growth was largely driven by a 22% increase in deposits from ZWL81 billion to ZWL98.7 billion. The Group’s statement of financial position includes a significant portion of foreign denominated assets and liabilities, which is underpinning our balance sheet strength. Total equity attributable to the shareholders of the company improved by 26% from ZWL31.4 billion to ZWL39.6 billion driven by an increase in retained profits and other nondistributable reserves.

Operating Environment

Notwithstanding the exchange rate and inflation-induced weaknesses, positive economic milestones have been noted in the domestic economy, such as increased foreign currency receipts, restraint on reserve money growth and a sustained current account surplus and high infrastructure investments. Resultantly, economic growth prospects have remained positive at a projected 4.6%, albeit a decrease from the initial projection of 5.5%. The economic growth is anchored on increased activity in the mining sector (9.5%), construction sector (10.5%), accommodation and food services sector (50%).

The hyperinflationary environment, exchange rate devaluation and the impact of geo-political developments in Eastern Europe continue to weigh down the growth potential of the local economy, as both fiscal and monetary policy authorities face the mammoth task of continuously addressing macro–economic adversities on the back of an unfolding global recession. The Group is however optimistic that recent policy pronouncements by the Government, together with the requisite industry support, will manage to stabilise the inflation and exchange rate environment and sustain positive economic growth.


Official year-on-year inflation surged from 60.7% in January 2022 to 191% in June 2022 before increasing to 256.9% in July 2022. Adverse inflationary pressures brought about by forward pricing, have accelerated the depreciation of the local currency, compounded by the impact of external geo-political factors. The hyperinflationary environment has reduced consumers’ purchasing power, precipitating the re-dollarization of the economy and weighing down on domestic demand. The Government continues to implement measures aimed at addressing speculative behaviour and exchange rate manipulation.

Exchange Rates

The period under review was characterised by significant exchange rate volatilities. The interbank exchange rate deteriorated by 237% during the period under review. The instability in exchange rates fuelled a rise in inflation, thereby triggering drastic measures by monetary authorities which included the temporary suspension of lending and an increase in the bank policy rate in line with inflation. There is optimism that the measures implemented by the authorities will result in the stabilization of inflation and the exchange rate.

Banking Sector Developments

The Reserve Bank of Zimbabwe has maintained a tight monetary stance in an effort to control inflation and stabilise the exchange rate. A number of measures and frameworks were introduced to instil economic confidence, foster market discipline and strengthen local currency demand. Key pronouncements made during the period under review included the temporary suspension of lending, entrenchment of the multicurrency system through the willing buyer willing seller rate, introduction of gold coins as a store of value and an increase in the bank policy interest rate from 80% to 200%. The bank policy rate was subsequently mandated to be the minimum lending rate with effect from 1 July 2022. Resultantly, interest rates across the banking sector have increased with interest rates of 100% p.a. and 200% p.a. being adopted as minimum lending rates to individuals and corporates respectively.

Insurance Sector Developments

In spite of the volatile economic environment, the Zimbabwe Insurance sector continues to be a sound risk mitigation system. The insurance market has significantly progressed with regards to regulatory capacity as informed by the regulatory initiatives introduced by Insurance and Pensions Commission (IPEC) in 2021.

The use of multi-currencies in the economy has provided an opportunity for the sector to increase insurance underwriting in foreign currency to the public. The Group’s insurance subsidiaries continue to explore opportunities in the environment to increase business underwriting.

FBC Reinsurance Limited was finally granted a short-term reinsurer licence in Botswana with operations having commenced on 1 July 2022. This development is in line with our regional expansion strategy.

Property Market Developments

The real estate sector remains suppressed as evidenced by low volume of transactions, increasing voids in offices occupancy levels in the central business district and limited availability of long term mortgage finance. Demand however remains high for residential properties which are also viewed as value-preserving assets in the face of hyperinflation. To this end, the Group continues to actively participate in the residential housing market through construction of new housing stock, thereby contributing to the National Development Strategy (NDS) 1 goals.

FBC Building Society’s has completed construction of 257 residential housing units at Kuwadzana Fontaine Ridge with a further 600 housing units targeted on a phased approach. The Society is also progressing well with a housing development at Zvishavane Eastlea Project where construction of 98 cluster housing units is underway with the project scheduled for completion by 31 December 2022.

Stock Market Performance

Negative real returns characterised the stock market in the first half of the year due to contractionary policy interventions that dampened market momentum. The all share index gained 83% for the six months compared with cumulative month on month inflation of 111% from January to June 2022.

Share Price Performance

The FBC Holdings Limited share price gained 121.54% to close the period under review at ZWL75.00. A total of 23 154 900 million shares were traded at a volume weighted average price of ZWL46.05.

FBC Holdings Limited repurchased ZWL133.5 million worth of shares under the share buyback scheme translating into a cumulative holding of 4.90% of the Group’s issued shares. It is the Group’s endeavour to create sustainable value for its shareholders.

Information Technology, Digital Transformation and Innovation Focus

As the global economy continues to accelerate towards digitally connected eco-systems, FBC Holdings Limited recognises the role that technology plays in delivering a unique customer experience in the current environment. As such, the Group has continued to invest in strengthening its digital capabilities and information security portfolios. In the first half of the year, FBCH focused on enhancing customer experience through the introduction of digitally inclined products and services. This thrust has seen the enhancement of electronic channels, with digital on-boarding being extended to our MasterCard products. The internet-banking platform remains a key service delivery channel and has been undergoing changes to adapt its functionality to the evolving needs of our valued customers.

The Group has made strides in revitalising systems and infrastructure configurations in order to guarantee seamless service delivery to customers – This resonates with the Group’s mantra “You Matter Most.” FBC Holdings has embraced the Cyber and Data Protection Act of 2022 and is making progress towards ensuring implementation and compliance.

Environment, Social and Governance (ESG) Priorities

ESG priorities have remained core to the growth of sustainable financial markets, signalling a total paradigm shift in terms of capital allocation. FBC Holding’s primary objective is to build a brand that is more aware of and responsible in the use of resources, impact on the environment and remains conscious and deliberate in its role to drive sustainable solutions in the communities it serves. The Group’s sustainability strategy seeks to identify, manage and mitigate the impacts and risks of FBCH’s actions in the environment with a view towards contributing to the reduction of it’s carbon footprint.

As the Group integrates sustainability into the corporate mainstream, we continue to take direction from the National Development Strategy 1 (2021-2025), Global Reporting Initiative (GRI) standards, revised Nationally Determined Contributions (NDCs) and other government policy pronouncements. We have also collaborated with development-oriented institutions in Zimbabwe and Southern Africa as we seek to align our strategy and operations to international best practices in the sustainability space.

Community Impact

As FBC Holdings, we have ingrained Corporate Social Responsibility (CSR) as an integral facet of our sustainability strategy. The Group is proud of having fulfilled its social obligation in the field of health, sports, arts and tourism. In this regard, FBC Holdings invested more than ZWL$95 million in community-driven corporate social responsibility initiatives in the first half of the year. The Group also sponsored the prestigious 2022 Zimbabwe Open Golf Tournament, as the title sponsor.


Reflecting on brand strength and diversity, the Group’s banking subsidiaries received two accolades in the first half of the year.

  1. The Marketers Association of Zimbabwe (MAZ) recognised FBC Bank as one of the leading local brands reflecting on the institution’s proficiency in extending tangible benefits which customers consciously or subconsciously recognize.
  2. The Zimbabwe CEO’s Network awarded FBC Building Society, the Business Leadership Commendation accolade in recognition of the institution’s support towards urban housing development in the country.

FBC Holdings appreciates the accolades associated with the FBC Brand and will endeavour to remain relevant and responsive to the changing socio-economic and market dynamics in the country.

Regulatory Developments and compliance

The macro-economic environment has necessitated the promulgation of numerous regulatory measures, thereby increasing the Group’s compliance burden over the review period. The regulatory authorities put in place a number of measures to stabilise the exchange rate and curb inflation. The Group Legal and Compliance division has robust systems in place to monitor compliance with all the regulatory pronouncements. The Group is committed to complying with all applicable laws, regulations, standards and international best practices and will continue to direct the necessary human, financial and technological resources to maintain the highest possible level of compliance.

The removal of Zimbabwe from the Financial Action Task Force (FATF) grey list at the end of March 2022 was a welcome development which is expected to benefit the economy through the opening up of avenues for foreign direct investments, enabling international trade and acquiring correspondent banking relationships.


As at 30 June 2022, all of FBC Holdings Limited subsidiaries were in compliance with their regulated capital thresholds. The Group’s strategy to invest in inflation-hedging assets has contributed immensely to sustainable capital growth for the subsidiaries, thereby withstanding the negative effects of the deteriorating exchange rate on the capital positions of the banking subsidiaries which are pegged in USD equivalents.


On behalf of the Board of FBC Holdings Limited, I am pleased to advise shareholders that an interim dividend of 148.82 ZWL cents per share was proposed for the half year ended 30 June 2022 after taking into account the performance of the Group and the need to continue strengthening the Group’s capital position. The interim dividend proposed, totalling ZWL1 billion translates to approximately 21.8 times cover.


The domestic economic situation will continue to be impacted by geo-political developments in the global economy. Positive developments within the domestic macro-environment however, signal prospects of sustainable economic growth and stability. In line with regulatory statutes, FBC Holdings Limited will continue to seek opportunities to preserve and grow shareholder value as well as enhance customer experience.


My sincere gratitude goes out to all our stakeholders, especially our valued customers, for their unwavering commitment and support to the FBC Brand despite a challenging operating environment. Your unwavering loyalty has contributed immensely to the continued success of all the subsidiaries of FBCH. As espoused in our vision, the Group will continue to nurture sustainable solutions that enable the financial wellbeing of the communities we serve.

“You Matter Most”

Herbert Nkala
Group Chairman

31 August 2022

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