FMBcapital Holdings Plc ( HY2019 Interim Report

We have extracted the Chairman’s Statement from the 2019 half year interim report for FMBcapital Holdings Plc (, listed on the Malawi Stock Exchange:

The establishment of a unified operating platform across the group to extract service and cost efficiencies is still continuing and we are starting to see improvements in the group’s reduction in overall year on year costs. The focus remains on completing this process so that long term growth is assured for the shareholders.

The Group continues to experience economic challenges in Zimbabwe, manifesting in high inflation, devaluation of the Zimbabwe dollar, combined with ongoing foreign currency challenges. In addition we are seeing pressure on the policy rate in Malawi, impacting lending margins there. Both of these events, but principally the impact of the changes in Zimbabwe significantly impacted the group’s profitability during the first half of 2019, with profit attributable to shareholders decreasing by 59% year on year. Adjusting for the impact of Zimbabwe, we would have seen year on year revenue and profitability growth across the group.

In general, business sentiment remains cautious across our territories of operation. This has limited our lending opportunities, given our measured and cautious lending approach across the group. However our balance sheet remains resilient with over 50% of total assets in liquid form thereby giving the group the capacity to easily take advantage of investment opportunities as they arise. Growth in customer liabilities has been contained accordingly with the focus on increasing the proportion of transactional balances.

During the period, we have completed a significant landmark in the corporate restructuring process of the group. After fulfilling all regulatory conditions in Botswana and Mozambique, we transferred First Capital Bank Plc Malawi’s shareholding in First Capital Bank Ltd (Botswana) and First Capital Bank S.A. (Mozambique) to FMBcapital Holdings Plc in February and June 2019 respectively.


The group has made significant investment in our Mozambique and Botswana operations to augment capital base. As a result, significant capacity exists to grow our assets and increase the proportion of higher yielding risk assets in our asset base. The migration and realignment of IT infrastructure in Zimbabwe is now bearing fruit with the enhanced operating platform expected to lead to savings to the group in the medium to long term. The capital adequacy and liquidity ratios of all group banks comfortably exceed the prescribed prudential minimum ratios in their respective territories. We will, however, continue to exercise prudence in our balance sheet management and do not foresee a major increase in our risk appetite given the current economic and business environment prevailing in territories where where we operate.

Dheeraj Dikshit       

Terence Davidson