The year under review for the bank was characterized by a fragile macro-economic environment. Intermittent restrictions and business lockdowns implemented by the Government and health authorities to curtail the spread of the COVID-19 health and social pandemic contributed to slowed down economic growth momentum. Yields on interest earning assets remained depressed in real terms as inflation picked up within the last quarter of the year. Total deposits grew by 90% y/y driven by a 279% growth in local currency deposits to an aggregate figure of ZWL$16.94bn. First Capital Bank reported a 244% growth y/y in interest income from ZWL$635.85mn to ZWL$2.19bn. Cost of funding remained benign in the period leading to a net interest income growing 282% to $2.15bn. First Capital Bank’s Loan to Deposit ratio greatly improved within the period growing to 42% from 27% in FY20 reflecting an increased risk appetite commensurate with a somewhat more stable monetary space. Loan composition however remained skewed towards short term loans due to the current transitory nature of deposits. The Non-funded income segment continued to drive revenue pulling in ZWL$4.25bn at the end of the period vs $2.07bn in FY20. The continued investment into digitizing operations yielded a net fee and commission income of $2.26bn. Net trading and foreign exchange income retreated 19% from a combination of flat foreign exchange trading income on the interbank market as well as moderating revaluations of the foreign currency earned on interbank transactions. Fair value gains on investment property however surged 358% to ZWL$990.86mn also propping up non-funded income segment. Overall, the bank registered net income growth of 147% to $6.34bn in revenue for the period under review. Operating costs grew 98% from ZWL$1.21bn to ZWL$2.96bn on the back of increased staff costs. However, the cost to income ratio marginally improved from 60% to 58%. The bank subsequently registered a ZWL$4.92bn profit for the year with the contribution from the joint venture in tourism rebounding 189%. FCB met the minimum capital requirements for Tier 1 with US$75mn versus a minimum of equivalent of US$30mn.
