The first half of the year proved a challenge to the sector at large on account of Covid-19 depressed economic activity and runaway inflation whilst yields remained negative in real terms, although up in nominal terms. The operating environment improved in the second half of the year on slowing inflation and relaxation of the restrictive lockdown measures. The Bank’s total deposits grew by 331% y/y driven by a 298% growth in local currency deposits to ZWL$4bn. First Capital Bank reported a 776% growth y/y in interest income from ZWL$74.64mn to ZWL$635.85mn. We estimate that yield in interest bearing assets lifted from circa 13% in FY20 to circa 24% in FY21 as cost of funding remained benign versus nominal interest rates. Notably, income from loans and receivables from banks and investment securities fell in real terms,contributing only 5.28% to the topline from 19.5% in the previous comparable period. The bank’s npl ratio trended below industry average at 0.16%. Interest expense grew 17.6% , however overall net interest income still grew695% y/y.
