18955 FMBCH_Press AD - 28 August 2023 - Proof 10A | |||||||
PROFIT | CUSTOMER | CUSTOMER | TOTAL | ||||
AFTER TAX | ADVANCES | DEPOSITS | ASSETS | ||||
67% é | 12% é | 26% é | 20% é | ||||
COST INCOME | RETURN ON | CREDIT LOSS | TOTAL | ||||
UNAUDITED SUMMARY CONSOLIDATED AND | |||||||
RATIO | AVERAGE EQUITY | RATIO | OPERATING | ||||
SEPARATE FINANCIAL STATEMENTS | 47% | 40% | 0.94% | INCOME | |||
for the six month interim period ended 30 June 2023 | 26% é | ||||||
Investment in subsidiary companies
At the end of the reporting period, the company's portfolio of investments in subsidiary companies was unchanged from the previous reporting period and comprised:
Holding % | USD'000 | |||
Name of entity | Nature of | Type of | ||
30 June 2023 | ||||
Business | Investment | |||
First Capital Bank Plc (Malawi) | Banking | Equity Shares | 100 | 88 034 |
Afcarme Zimbabwe Holdings (Private) Limited*Banking | Equity Shares | 100 | 17 670 | |
First Capital Bank (Zambia) Limited | Banking | Equity Shares | 49 | 4 634 |
First Capital Shared Services Limited | Shared Services | Equity Shares | 100 | 4 160 |
First Capital Bank Ltd (Botswana) | Banking | Equity Shares | 38.6 | 3 047 |
First Capital Bank Ltd (Botswana) | Banking | Preference Shares | 100 | 2 475 |
First Capital Bank S.A. (Mozambique) | Banking | Equity Shares | 80 | 21 366 |
Total investment in subsidiary companies | 141 386 |
* Afcarme owns 52.51% of First Capital Bank Zimbabwe.
Summary statements of comprehensive income
CONSOLIDATED | SEPARATE | |||||
UNAUDITED | AUDITED | UNAUDITED | AUDITED | |||
Six | Six | Six | Six | |||
months | months | Year | months | months | Year | |
ended | ended | ended | ended | ended | ended | |
30 June | 30 June | 31 Dec | 30 June | 30 June | 31 Dec | |
USD'000 | 2023 | 2022 | 2022 | 2023 | 2022 | 2022 |
Interest and similar income | 90 461 | 70 236 | 148 248 | 149 | 143 | 291 |
Interest expense and | ||||||
similar charges | (25 627) | (18 179) | (38 782) | (1 162) | (1 210) | (2 381) |
Net interest income/(expense) | 64 834 | 52 057 | 109 466 | (1 013) | (1 067) | (2 090) |
Non-interest income | 56 088 | 43 686 | 82 087 | 15 218 | 13 922 | 24 395 |
Total operating income | 120 922 | 95 743 | 191 553 | 14 205 | 12 855 | 22 305 |
Operating expenses | (57 356) | (48 463) | (96 295) | (5 286) | (2 139) | (8 655) |
Impairment loss on | ||||||
financial assets | (6 251) | (2 864) | (4 202) | - | - | - |
Operating profit | 57 315 | 44 416 | 91 056 | 8 919 | 10 716 | 13 650 |
Net monetary loss | - | (4 811) | (7 662) | - | - | - |
Impairment reversal/(loss) on | ||||||
investment in joint venture | - | 131 | (719) | - | - | - |
Share of profit in joint venture | - | 426 | 4 424 | - | - | - |
Profit before income | ||||||
tax expense | 57 315 | 40 162 | 87 099 | 8 919 | 10 716 | 13 650 |
Income tax expense | (15 283) | (14 919) | (25 904) | (1 073) | (1 040) | (1 692) |
Summary statements of financial position
CONSOLIDATED | SEPARATE | |||||
UNAUDITED | AUDITED | UNAUDITED | AUDITED | |||
As at | As at | As at | As at | As at | As at | |
30 June | 30 June | 31 Dec | 30 June | 30 June | 31 Dec | |
USD'000 | 2023 | 2022 | 2022 | 2023 | 2022 | 2022 |
ASSETS | ||||||
Cash and balances with | ||||||
central banks | 392 206 | 290 411 | 384 137 | 1 562 | 8 010 | 2 897 |
Money market investments | 297 750 | 212 310 | 212 189 | - | - | - |
Loans and advances | ||||||
to customers | 700 022 | 625 790 | 651 726 | - | - | - |
Repurchase agreements | 16 738 | 31 391 | 13 919 | - | - | - |
Current tax asset | 1 126 | 714 | 2 375 | - | - | - |
Assets held for sale | 81 | 254 | 133 | - | - | - |
Investments at fair value | ||||||
through profit or loss | 10 736 | 3 395 | 4 611 | - | - | - |
Investments at fair | ||||||
value through other | ||||||
comprehensive income | 4 435 | 5 302 | 5 906 | - | - | - |
Investments in | ||||||
subsidiary companies | - | - | - | 141 386 | 141 386 | 141 386 |
Investment in joint venture | 15 580 | 11 972 | 15 580 | - | - | - |
Other assets | 21 141 | 32 535 | 27 061 | 5 919 | 6 302 | 5 441 |
Investment property | 4 800 | 4 700 | 4 800 | - | - | - |
Intangible assets | 7 509 | 7 841 | 8 251 | 3 986 | 2 833 | 3 923 |
Property and equipment | ||||||
and right-of-use assets | 69 667 | 59 129 | 60 614 | 691 | 675 | 828 |
Deferred tax assets | 1 622 | 3 513 | 2 262 | - | - | - |
Summary statements of cash flows
CONSOLIDATED | SEPARATE | |||||
UNAUDITED | AUDITED | UNAUDITED | AUDITED | |||
Six | Six | Six | Six | |||
months | months | Year | months | months | Year | |
ended | ended | ended | ended | ended | ended | |
30 June | 30 June | 31 Dec | 30 June | 30 June | 31 Dec | |
USD'000 | 2023 | 2022 | 2022 | 2023 | 2022 | 2022 |
Net cash generated from | ||||||
operating activities | 124 889 | 54 860 | 211 315 | 7 619 | 1 618 | 10 977 |
Net cash (used in)/generated | ||||||
from investing activities | (105 122) | (67 311) | 93 116 | (663) | (4 045) | (2 658) |
Net cash (used in)/generated | ||||||
from financing activities | (5 880) | 29 791 | (191 198) | (8 291) | 1 337 | (14 522) |
Net increase/(decrease) in cash | ||||||
and cash equivalents | 13 887 | 17 340 | 113 233 | (1 335) | (1 090) | (6 203) |
Cash and cash equivalents at | ||||||
beginning of period | 384 151 | 308 755 | 308 755 | 2 897 | 9 100 | 9 100 |
Effect of changes in exchange rate* | (5 818) | (35 643) | (37 837) | - | - | - |
Cash and cash equivalents at | ||||||
end of period** | 392 220 | 290 452 | 384 151 | 1 562 | 8 010 | 2 897 |
- Comparative periods incorporate effects of hyperinflation
** Excludes provision for expected credit losses
ADDITIONAL INFORMATION
Debt and other liabilities
Balances due to other banks
UNAUDITED AUDITED
REVIEW OF PERIOD
Group results
The FMBcapital Holdings (FMBCH) Group delivered a robust performance in the six-months to 30 June 2023. FMBCH subsidiaries registered continued balance sheet growth in support of over half a million clients.
Key highlights of the Group's 2023 interim performance include:
- Net interest income for the half year is up 25% and total non-interest income is up 28%, resulting in total operating income of USD 121 million - a growth of 26% period on period.
- Profit after tax is USD 42 million - up 67% from June 2022.
- Profit after tax attributable to owners of FMBCH is USD 30 million, delivering 73% growth period on period.
- Loans and advances to customers grew by 12%, closing at USD 700 million.
- Credit loss ratio on customer advances (net impairment expense as a proportion of average advances) was 0.94% (June 2022: 0.5%).
- Customer deposits are up 26% to more than USD 1.13 billion.
Effective 1 January 2023, FMBCH's Zimbabwe operation changed its functional currency from the Zimbabwe Dollar to the United States Dollar due to its listing on the Victoria Falls Stock Exchange.
The Group's strategy remains a growth oriented one, building into a significant regional bank with a diversified portfolio of corporate, business and consumer banking solutions, complemented by relevant treasury activities. Enterprise risk governance is a mainstay of the oversight process, such that capital, liquidity, and other resource allocations are optimised.
Profit after tax by country
UNAUDITED | AUDITED | |||
Six months | Six months | Period on | ||
ended | ended | Year ended | period | |
USD Million | 30 June 2023 | 30 June 2022 | 31 Dec 2022 | growth |
Botswana | 7.65 | 6.53 | 13.66 | 17% |
Malawi | 16.33 | 8.71 | 19.34 | 87% |
Mauritius | (2.19) | (0.03) | (4.24) | (7 193%) |
Mozambique | 8.93 | 3.78 | 11.05 | 136% |
Zambia | 4.50 | 5.00 | 10.01 | (10%) |
Profit for the year | 42 032 | 25 243 | 61 195 | 7 846 | 9 676 | 11 958 |
Other comprehensive income | ||||||
Items that will not be classified | ||||||
to profit or loss | ||||||
Revaluation (reversal)/surplus | ||||||
on property | (5 314) | - | 3 351 | - | - | - |
Deferred tax on revalued | ||||||
property | 1 958 | - | 592 | - | - | - |
Fair value (loss)/gain on | ||||||
investments net of | ||||||
deferred tax | (2 365) | 1 851 | 205 | - | - | - |
Fair value gain/(loss) on FVOCI | ||||||
financial assets | 72 | - | (58) | - | - | - |
(5 649) | 1 851 | 4 090 | - | - | - | |
Items that may be reclassified | ||||||
subsequently to profit or loss | ||||||
Exchange differences on | ||||||
translating foreign operations* | (1 875) | (5 881) | (35 663) | - | - | - |
Total other comprehensive loss | ||||||
for the year | (7 524) | (4 030) | (31 573) | - | - | - |
Total comprehensive income | ||||||
for the year | 34 508 | 21 213 | 29 622 | 7 846 | 9 676 | 11 958 |
Profit attributable to: | ||||||
Owners of the parent | 30 024 | 17 332 | 40 089 | 7 846 | 9 676 | 11 958 |
Non-controlling interest | 12 008 | 7 911 | 21 106 | - | - | - |
Profit for the year | 42 032 | 25 243 | 61 195 | 7 846 | 9 676 | 11 958 |
Total comprehensive income | ||||||
attributable to: | ||||||
Owners of the parent | 26 601 | 14 987 | 17 589 | 7 846 | 9 676 | 11 958 |
Non-controlling interest | 7 907 | 6 226 | 12 033 | - | - | - |
Total comprehensive income | ||||||
for the year | 34 508 | 21 213 | 29 622 | 7 846 | 9 676 | 11 958 |
Basic earnings per share | ||||||
(US cents) | 1.221 | 0.705 | 1.631 | |||
Diluted earnings per share | ||||||
(US cents) | 1.133 | 0.664 | 1.525 | |||
* Comparative periods incorporate effects of hyperinflation
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Total assets | 1 543 413 | 1 289 257 | 1 393 564 | 153 544 | 159 206 | 154 475 |
LIABILITIES AND EQUITY | ||||||
Liabilities | ||||||
Balances due to other banks | 82 188 | 114 533 | 47 647 | - | - | - |
Customer deposits | 1 133 897 | 896 905 | 1 039 070 | - | - | - |
Other payables | ||||||
and provisions | 64 909 | 51 497 | 58 862 | 1 369 | 4 447 | 1 189 |
Current tax liabilities | 6 109 | 3 814 | 3 748 | - | - | - |
Deferred tax liabilities | 3 881 | 2 816 | 7 442 | - | - | - |
Loans payable | 16 035 | 21 745 | 16 679 | 16 035 | 16 745 | 16 679 |
Subordinated debt | 8 314 | 12 804 | 12 447 | - | - | - |
Convertible preference shares | 10 787 | 10 787 | 10 787 | 10 787 | 10 787 | 10 787 |
Total liabilities | 1 326 120 | 1 114 901 | 1 196 682 | 28 191 | 31 979 | 28 655 |
Equity | ||||||
Share capital | 117 409 | 117 409 | 117 409 | 117 409 | 117 409 | 117 409 |
Restructuring reserve | (54 511) | (54 511) | (54 511) | - | - | - |
Property revaluation reserve | 8 928 | 6 932 | 10 189 | - | - | - |
Loan loss reserve | 3 097 | 4 404 | 3 097 | - | - | - |
Other reserves | 2 977 | 6 561 | 4 181 | - | - | - |
Foreign currency | ||||||
translation reserve | (51 182) | (32 857) | (50 594) | - | - | - |
Retained earnings | 119 857 | 61 583 | 98 146 | 7 944 | 9 818 | 8 411 |
Total equity attributable | ||||||
to equity holders | ||||||
of the company | 146 575 | 109 521 | 127 917 | 125 353 | 127 227 | 125 820 |
Non-controlling Interest | 70 718 | 64 835 | 68 965 | - | - | - |
Total equity | 217 293 | 174 356 | 196 882 | 125 353 | 127 227 | 125 820 |
Total equity and liabilities | 1 543 413 | 1 289 257 | 1 393 564 | 153 544 | 159 206 | 154 475 |
Summary statements of changes in equity
CONSOLIDATED | SEPARATE | |||||
UNAUDITED | AUDITED | UNAUDITED | AUDITED | |||
Six | Six | Six | Six | |||
months | months | Year | months | months | Year | |
ended | ended | ended | ended | ended | ended | |
30 June | 30 June | 31 Dec | 30 June | 30 June | 31 Dec | |
USD'000 | 2023 | 2022 | 2022 | 2023 | 2022 | 2022 |
Opening equity | 196 882 | 181 362 | 181 362 | 125 820 | 120 008 | 120 008 |
Profit for the period | 42 032 | 25 243 | 61 195 | 7 846 | 9 677 | 11 958 |
Total other comprehensive loss | (7 524) | (4 030) | (31 573) | - | - | - |
Dividends declared and paid | (14 097) | (8 218) | (13 676) | (8 313) | (2 458) | (6 146) |
Movements in other reserves | - | (20 001) | (426) | - | - | - |
Closing equity | 217 293 | 174 356 | 196 882 | 125 353 | 127 227 | 125 820 |
As at | As at | As at | ||||||
30 June | 30 June | 31 Dec | ||||||
USD'000 | 2023 | 2022 | 2022 | |||||
Deposits from banks | 51 138 | 55 055 | 15 842 | |||||
Currency swap liabilities | 16 100 | 50 168 | 18 153 | |||||
European Investment Bank (EIB) | 4 112 | 115 | - | |||||
Bank of Zambia - TMTRF | 7 757 | - | 7 484 | |||||
FMO Line of Credit | 3 081 | 9 195 | 6 168 | |||||
82 188 | 114 533 | 47 647 | ||||||
Maturing as follows | ||||||||
Due within 1 year | 78 056 | 95 930 | 43 635 | |||||
Due between 2 and 5 years | 4 132 | 18 603 | 4 012 | |||||
82 188 | 114 533 | 47 647 | ||||||
The European Investment Bank (EIB) line of credit for FCB Malawi, | ||||||||
which is denominated in US Dollars, carries interest between 3.9% | ||||||||
and 5.8% per annum and is repayable in equal bi-annual instalments. | ||||||||
In 2020, FCB Zambia secured a targeted medium-term refinancing | ||||||||
facility, Bank of Zambia - Targeted Medium Term Refinancing | ||||||||
Facility, for on-lending to customers. Interest is payable linked to | ||||||||
the Zambia Monetary policy rate which was 8% per annum. The loan | ||||||||
is repayable in quarterly installments with interest. The loan was | ||||||||
disbursed in three tranches whose maturity dates are | ||||||||
1 September 2023, 4 February 2024 and 8 February 2025. | ||||||||
Subordinated debt | ||||||||
Notes issued by FCB Botswana | 8 314 | 12 804 | 12 447 | |||||
The subordinated debt notes constitute direct, subordinated | ||||||||
and unsecured obligations and the terms are unchanged from | ||||||||
30 June 2022. In 2022, First Capital Bank Botswana (FCB Botswana) | ||||||||
issued BWP 15 million (USD 1.2 million). These are floating rate | ||||||||
notes maturing on 1 July 2027, which earn interest at a cumulative | ||||||||
rate of 7.96% following introduction of the Monetary Policy rate | ||||||||
(MOPR) by the Bank of Botswana (BOB) in April 2022. | ||||||||
Loans payable | ||||||||
Related parties | 6 500 | 6 600 | 6 500 | |||||
Other lenders | 9 535 | 15 145 | 10 179 | |||||
16 035 | 21 745 | 16 679 | ||||||
Related party loans are unsecured and repayable in full in 2026. | ||||||||
These loans bear interest of 9% payable annually. | ||||||||
Exchange rate trends | ||||||||
30 June 2023 | 30 June 2022 | 31 Dec 2022 | ||||||
Country | Average | Closing | Average | Closing | Average | Closing | ||
Currency | rate | rate | rate | rate | rate | rate | ||
Botswana | BWP | 13.44 | 13.51 | 11.79 | 12.33 | 12.76 | 12.32 | |
Malawi | MWK | 1 035.20 | 1 053.43 | 848.84 | 1 025.85 | 1 026.09 | 937.46 | |
Mauritius | MUR | 45.43 | 45.55 | 43.79 | 45.55 | 43.65 | 43.91 | |
Mozambique | MZN | 63.88 | 63.88 | 63.83 | 63.83 | 63.87 | 63.84 | |
Zambia | ZMW | 18.82 | 17.59 | 17.59 | 17.01 | 18.11 | 16.89 | |
Zimbabwe | ZWL | 5 555.87 | 5 739.80 | 366.27 | 366.27 | 687.28 | 687.28 | |
Zimbabwe | 6.81 | 1.25 | 11.37 | 445% |
Total | 42.03 | 25.24 | 61.19 | 67% |
Performance landscape and outlook
Global growth is expected to slow. The International Monetary Fund (IMF) projects that global growth will fall by 0.5% to 3.0% in 2024. The IMF expects the sub-SaharanAfrica economy to grow at 3.5% and 4.1% in 2023 and 2024, respectively. This growth outlook presents a continued muted and challenging outlook.
Interim results to June 2023 were bolstered by equity investment gains in Malawi and high trading margins in Malawi, Mozambique and Zimbabwe, which the Board is of the view may not recur on the scale seen in the interim period under review.
As a result of the above factors, the Board's assessment of near-term performance is that the FMBCH Group's second half of 2023 is unlikely to exceed the first half in growth and profitability.
Despite these challenges, the Group's results for the period ended 30 June 2023 reflect a healthy and growing brand.
Dividend
The Board of directors has resolved to pay an interim dividend of USD 5 162 325 being 0.21 US cents per share (June 2022: 0.15 US cents). The interim dividend will be paid on or about 15 November 2023 to shareholders whose names will appear on the Register of Members at close of business on 10 November 2023. The dividend will be paid to Malawi resident shareholders in Malawi Kwacha calculated at the closing USD mid-market rate on 10 November 2023 as published by the Reserve Bank of Malawi. The Register of Members will be closed from 10 to 13 November 2023 both days inclusive. During this period, no share transactions will be conducted.
The Board's intent is to maintain a regular dividend policy subject to the Group's growth aspirations. By order of the board
Mr. Terence Davidson | Mr. Busisa Moyo |
Chairman | Director |
30 August 2023 |
Where to find us
Registered Office: | Branch Office: |
C/o: JTC Fiduciary Services | Livingstone Towers, Glyn Jones Road |
(Mauritius) Limited, | Private Bag 122, Blantyre, Malawi |
Unit 5ABC, 5th Floor, Standard | Tel: +265 1 821955 / 821943 |
Chartered Tower,
19 Cybercity, Ebène, Mauritius
Belief comes first.
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Disclaimer
FMBcapital Holdings plc published this content on 30 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 August 2023 07:05:25 UTC.