First Capital Bank Limited ( HY2019 Interim Report

We have extracted a Chairman’s Statement from 2019 half year interim report for First Capital Bank Limited (, listed on the Zimbabwe Stock Exchange:

The macroeconomic backdrop

The macroeconomic environment in the first half of 2019 has been challenging. Year on year inflation was reported at 175.66% at the end of the period under review. Demand for goods and services continued to be depressed. Price distortions that existed from prior periods continued to be observed in the market, threatening the viability of some businesses. A number of significant policy changes aimed at addressing the currency issues as well as fiscal and external sector deficits were introduced during the period. These measures are in line with the Transitional Stabilisation Program introduced by the government in 2018. Key monetary policies pronounced culminated in the removal of the multicurrency system and adoption of the Zimbabwean dollar as the sole legal tender. This was a major adjustment impacting both business and the transacting public. The Bank is continuously monitoring these policy changes, and adapting its strategy as appropriate. While doing this, the Bank also continues to assist its clients to understand and navigate the policy changes.


The Bank registered a profit after tax of ZWL$68.1 million translating to a basic earnings per share of 3.16 cents for the period (June 2018 – 0.63 cents per share). A significant part of the earnings reflects the revaluation of investments which includes the effect of change in functional currency. The underlying trading result takes into account costs associated with the migration of the Bank’s Information Technology systems.

Capital and liquidity

The Bank is adequately capitalised above the minimum regulatory core capital requirement of ZWL$100 million. The Bank’s total capital adequacy ratio closed the half year at 29% up from 25% in June 2018. This is above the minimum requirement of 12% and reflects significant capacity to deploy more assets. The Bank’s liquidity ratio at 58% remains significantly above the regulatory minimum of 30%.

Investment in the community

In keeping with its chosen purpose which is ‘to enable people achieve their extraordinary’ the Bank continues to actively engage the communities in which it operates. The Bank’s community investment programs focus on financial education and skills, enterprise development and financial inclusion. During the period under review the Bank continued to sustain its strategic partnerships with selected organisations that have relevant expertise in socio-economic development programs such as Zimbabwe Farmers Union, World Vision Zimbabwe, BOOST Fellowship and Junior Achievement Zimbabwe. A total of over 4500 youths benefited from the Bank’s community development programs over the period. Employees took part in volunteerism activities donating significant amounts of time and effort within the same programs.


The Bank remains committed to the highest standards in corporate governance, over and above observing the requirements of the Reserve Bank of Zimbabwe, the Zimbabwe Stock Exchange and other regulators. During the period under review, Emma Fundira, retired from the Board after serving a full term of ten years per regulatory requirements. During her tenure on the Board Emma contributed immensely and her invaluable experience and wise counsel will be greatly missed. On behalf of the Bank and the Board I wish her the best in her future endeavours.


The Bank successfully transitioned from Barclays PLC to First Capital Bank systems in March 2019. This was a hugely complex project, covering 59 applications, including the core banking system. I would like to pay special tribute to management and staff at the Bank for their dedication and commitment throughout this period.


The macroeconomic environment is expected to remain in a transitional mode into the foreseeable future. Analysts are projecting negative economic growth for the year. For example the International Monetary Fund is projecting a negative Gross Domestic Product of 5.2% to the end of the year. The recent investment in new Information Technology systems by the Bank will provide an enhanced digital product offering and improved customer experience. The Bank remains focused to deliver superior value to its customers and broader stakeholders on a sustainable basis into the future.


Given the uncertainties in the macroeconomic environment, coupled with investment planned for the implementation of its reviewed operating model, the Board does not propose an interim dividend for the period under review.

S. Mtsambiwa